The stock market is looking weak for the last 24-48 hours. We have seen DJIA, S&P 500 and Nasdaq all down between 0.2% and 0.6%. The similar pattern was also seen during Asian session with Nikkei and HSI down 2.17% and 0.76% respectively. German DAX also reversed significantly lower in this week so it seems that stocks are turning slightly bearish, but most likely only for another correction. On the German DAX daily chart I see wave four unfolding back to 8970/80 region. German DAX (Dec 2013) Daily Elliott Wave
I am not really sure how the weak stock market will impact the EUR/USD, simply because correlation is not working for the last couple of months. However, I see weak AUD/USD, which I believe will stay bearish and even accelerate to the downside as long as stocks will be in pullback mode. So for shorts AUD/USD may not be a bad idea.
DAX vs EUR vs AUD 4h
On hourly chart of AUD/USD we have seen a nice, perfect reversal from 0.9145 two sessions back where wave E completed a running triangle in wave B). Pair is now already at the lows so we are tracking wave C) down that should by made by five smaller waves. As such, we expect more downside, to 0.8950 possibly even to 0.8900. Any small pullback later today could stops at 0.9050/60 region
AUD/USD 1h Elliott Wave