17.02.201408:43 Forex Analysis & Reviews: Elliott Wave Analysis of AUD/USD for February 17, 2014

AUD/USD Elliott Wave
Last week, the AUD/USD pair traded upwards, impulsive wave [i] (coloured black) of the bigger wave C (coloured blue) developed. In the 1-hour chart above, we can see that the price is pushing aggressively higher after the pair found support at the 0.8925 level, the end of the blue B wave. Impulsive wave [i] should be over in the next few hours and that is why we are going to look for the short term selling opportunity against the 0.9100 level. In accordance with our wave rules and taking into account that wave [ii] should extend 50% of wave [i], we can define the potential targets with measuring wave [i] with take profit at 0.8997 (50% of wave [i]). The RSI indicator is showing marginal divergence that need to stay intact while price don't finish corrective wave [ii] or our primary count become invalid.

Alternate count: Wave B did not manage to make a full 50% retrace that we wanted, so if we see new lows below the 0.8930 level, we need to look at the B wave as FLAT correction, if this become a case, we are going to look for buying opportunity around the 0.8860 area.

Support and Resistance
(S3) 0.8905, (S2) 0.8936, (S1) 0.8982, (PP) 0.9013, (R1) 0.9059, (R2) 0.9090, (R3) 0.9136.

Trading forecast
Proceeding from Elliot Wave rules today, the trend is expected to begin the downward movements. That is why short positions at the level of 0.9045 with stop loss at 0.9100 take profit at 0.8997 are recommended.