AUDUSD trade setup

AUDUSD continued bearish after correcting upside

Aussie is one of our best currency pairs of the week after completing a clear wave pattern that we understood very well. Price played out just as expected. Will there be any trade opportunity soon? Yes there is. A new AUDUSD setup preparing to launch as explained below.

In the last update on AUDUSD, I discussed about how important it is as an Elliott wave trader to use simple patterns. Simple patterns are clear, unambiguous and often more profitable and accurate. From the last update, we highlighted the wave patterns inherent in the Aussie.

Don’t forget that it was just last week, when we predicted price would rally. We also predicted about the expected structure of the rally – a 3 wave bullish correction. In the last update, we spotted 0.798-0.8 as the reversal zone for price to stay downside. All these played out amazingly accurate.

The chart below was used in the last update.

AUDUSD Elliott wave analysis, H2

 

The chart above shows price is about to complete a 3-wave corrective rally upside and we have marked 0.798-0.8 as the possible zone where the bears could win over again.

When price got to this zone, the next point was to wait for a reversal signal. Price needed to show us that it will acknowledge the highlighted prices as a reversal zone. We followed this on the free Telegram channel. The chart below was shared in the Channel.

AUDUSD trade setup

AUDUSD Elliott wave analysis, M15

Price dropped exactly at the exact reversal zone we expected. The drop from the zone was impulsive (first sign that price would drop further). A 3-wave correction would soon follow (trade opportunity arising). A sell at 0.7938-0.7953 would be ideal with SL slightly above 0.799 (Invalidity price). What happened afterward? Price didn’t make further bullish move too our trade zone before dropping further. It looked like we would miss the opportunity. After a while, price didn’t bridge below 0.7890 low to confirm bearish continuation but formed renewed corrective pattern that we had in the chart above. Then we made an update in the Free Telegram channel with the chart below.

AUDUSD trade setup

AUDUSD Elliott wave analysis, M15

Looked like a Flat? Yes, it is a Flat pattern. Price morphed from the earlier Zigzag expectation to a very clear regular Flat corrective pattern. With this pattern, we at least predicted the end of wave ii at 0.7934 and had a pending order at 50% retracement (0.7907) holding 0.7934 as the invalid price for the Flat pattern. The R/R of this setup is very huge. That’s the kind of trade anyone would want to take. The SL should have still remained at 0.799 but the more aggressive SL was used for a much bigger R/R. What happened afterward?

AUDUSD trade setup

AUDUSD Elliott wave analysis, M15

Setup triggered and we started counting a new impulsive wave (of lower degree) iii of (iii) downside. SL was adjusted at the top of 0.7908 (almost Breakeven) as we anticipated drop to 0.78. the chart below shows what we have afterward.

AUDUSD trade setup

AUDUSD Elliott wave analysis, M15

60 Pips guaranteed (more than 1:2 R/R) and still room for more moves downside. Wave iii of (iii) is still ongoing to 0.78. Price eventually dropped below 0.78 to complete wave (iii). When will the next opportunity be? At the end of wave (iv) as shown in the chart below.

AUDUSD trade setup

AUDUSD Elliott wave analysis, M15

And that is it. Final target achieved. More than 1:3 R/R. Another opportunity is to wait for the end of wave (iv) as shown above. The reversal zone is at 0.7830-0.7850. That’s how simple it can be when we keep it simple. How will price react when it gets there? We need to be patient to know. Activities will continue on the free Telegram channel where we share analysis, forecasts and trade setups/signals on the Forex, Commodity and Crypto markets. Join us and stay tuned.

Let me know your thought in the comment box below.

 

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