Saturday, January 25, 2014
AUD/USD - Impulsive decline from 0.8888 points to more downside action.
Juan asked if I would look for a recovery from near 0.85?
The answer is no!
I did look for a wave 2 correction a bit higher than the 0.9086 we reached (I was looking for a correction towards 0.9178 before lower Again). The decline from 0.9086 does look impulsive and fits well into my expectation of a wave 3 decline developing. I will look for resistance near 0.8772 protecting the upside for a decline towards at least 0.8144 and more likely even lower towards 0.7564. I think it's worth noticing that we have broken below the long term support line, but we need more than one close below this line to confirm the break.
To keep the above scenario to stay valid, resistance at 0.8888 has to stay unbroken. A break above 0.8888 will open up for a rally towards 0.9178.