AUD/USD - Ending diagonal still in play here
In yesterday's post, I said that a break above 0.7664 would question the bearish outlook. We have seen a small break above 0.7664 with a high seen at 0,7672. therefore, I have been taking a closer look at the price-action since the 0.7418 low. Instead of count it all as part of the ending diagonal, a better fit might be that the rally from 0.7418 to 0.7615 was a small wave a followed by wave b lower to 0.7484 and then the ending diagonal as wave c higher to 0.7675 as wave c.
Wave c will be equal in length to wave a at 0.7675 and will at the same time stay just below the starting point of wave i at 0.7676 keeping the guidelines of the Elliott Wave Principle intact.
So from 0.7675 a strong decline is expected, with the first minor target being the origin of the ending diagonal at 0.7484, but looking at the larger picture, much more downside pressure should be expected towards 0.7294 and likely even lower to 0.7060.
Should a break above 0.7676 be seen, that would invalidate the immediately bearish count and suggest that wave 2 isn't complete yet, but the potential upside should be very limited and likely not move higher than 0.7707 before topping out and start the next impulsive decline.
Only an unexpected break above 0.7835 will invalidate the bearish outlook altogether.