The Australian dollar reversed unexpectedly to the downside against the U.S. dollar (FOREX:AUDUSD) in the last few weeks and is now trading very close to yearly lows. As such, we are now tracking a new wave count as current bearish price action is quite strong and signals for a push to new downside levels. We are now observing an ending diagonal pattern because of contracting trendlines. Based on the current outlook, the pair could extend down to 0.8500-0.8600 in early 2014 where the wave (5) final leg within a pattern could look for a support.
AUD/USD weekly Elliott Wave Analysis
AUD/USD turned bearish as expected last week after we identified a temporary recovery labeled as wave 4. The pair is now moving south in a wave 5 that could reach levels around 0.9600 in the next week before we see a three wave reversal to the upside. Keep in mind that the pair is now in fifth wave, final part of an impulsive price action.
AUD/USD Daily Elliott Wave Analysis
AUD/USD reversed perfectly lower this week from the 0.8886 figure where a broken channel line turned into resistance after a minor three wave rally up, now labeled as wave (ii). The pair is already at the lows now falling sharply down, which we think it's wave (iii) of a five wave decline in wave 5.
AUD/USD four-hour Elliott Wave Analysis