Thursday, October 23, 2014

Elliott wave analysis of AUD/USD - Time to break out of the Diamond formation?

AUD/USD time to break out of the Diamond formation? 
The Diamond formation we have been tracking lately is getting close to its termination. I'm still looking for this Diamond to be a continuation formation, which means a break towards the downside for a decline to the long term target at 0.7384. 
That said, we have to be aware, that Diamond formations also can be reversal formation and if this is the case a break above 0.8833 will be the first warning, while a break above 0.8860 will confirm the formation has been a reversal formation and call for a rally higher to 0.9112. 
As said my preferred count is, that we should soon see a break lower, which would make this Diamond formation a continuation pattern, but we know the risk, this pattern carries. 

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