FX.co ★ Elliott Wave Analysis of AUD/USD for February 07, 2014

AUD/USD Elliott Wave
For more than two weeks, the AUD/USD pair has been trading upwards, impulsive wave [i] (coloured green) of the bigger wave (B) (coloured red) has been developing. If you look at the 1-hour chart of the AUD/USD pair, we can observe that move from the 0.8659 looks impulsive, if our count is correct we are currently in the (iv) wave that should provide as the fresh buying signal at the next push lower toward 0.8872, 38.2% of the (iii) wave.In accordance with our wave rules and taking into account that wave 5 should retrace 161.8% of wave 4, we can define the potential targets with measuring wave 4 with take profit at 0.8917 (161.8% of wave 4). The RSI is showing divergence from the wave iii of (iii), and this divergence should stay intact when price break higher in the wave (v) (blue).

Support and Resistance
(S3) 0.8845, (S2) 0.8877, (S1) 0.8917, (PP) 0.8949, (R1) 0.8989, (R2) 0.9021, (R3) 0.9061.

Trading forecast
Proceeding from Elliot Wave rules today, the trend is expected to begin the upward movements. That is why long positions at the level of 0.8872 with stop loss at 0.8830 take profit at 0.8917 are recommended.