For those who follow me for a longer period of time might remember me calling 0.81 to be fair value for AUDUSD according to my analysis. I think both technicals by means of structure as fundamentals suggest that this correction on the daily time frame is not over yet. First let's have a look at the weekly chart for context: Focusing on wave C on tells us several things. First of all; it seems like wave 1 of wave C was a leading diagonal and like I mentioned in my NZDUSD posts recently, a diagonal wave often comes with a Zig-Zag (ABC) correction. I believe we might see such a Zig-Zag (ABC) correction on the daily and 4 hour time frame. The question is whether this potential ABC is already over and therefore I prepared two scenario's on the lower time frames. 4hr bullish 4hr bearish Key for both scenario's is that I expect either a retrace by means of a consolidation (bullish scenario) or a sharp reversal (bearish scenario) for a slightly lower low for wave C.
This is what I'm waiting for because although this is my bias (move to 0.81) I will wait for the market to confirm this to me.
Thanks for your analysis. If wave 1 of wave C was a leading diagonal then the Zig-Zag (ABC) correction would be much deeper because leading diagonals are typically deeply retraced. So far the Zig-Zag retraced only around 50% of a leading diagonal wave 1. IMO it still has a room to drop more (up to 0,7280 which is 78,6% retracement of a leading diagonal).
TimStuyts
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That is a guideline indeed but not a rule. Therefore I present two scenario's. Don't get biased by guidelines because we also have to keep in mind that the first leg higher for wave C might be more complex and not a leading diagonal. So build a case and put as many variables in your advantage, then decide whether or not to trade the set-up. For me the reversal is key, we either see a consolidation or sharp reversal. That will tell us what to do next.