EUR/AUD: Corrections Are Opportunities
Mar 08 2021
Today we are talking about a forex minor: EURAUD, which has been in downtrend for a while as commodity currencies will usually do much better in risk-on environment, and Aus-tralian dollar was no exception. Currency has been on the rise against the EUR since March of last yet. Pair lost more than 3000 pips after that spike high in March 2020 when we start-ed tracking bearish cycle and looked at each bounce as a correction on the way down.
One of those correction happened back in February that was also shared with our members. We sent an update on February 3rd when we were expecting a continuation to the downside because of an incomplete five-wave cycle (see schematic below).
Our analyst noted the following:
»...we can see an unfinished five-wave cycle, so it can push the price even lower within wave (5) that can stop anywhere in the 1.55 - 1.50 target area...«
EUR/AUD Feb 03 2021
As you can see from today’s chart below, the price stopped at 1.525 which would be predict-ed, as we did, by projecting the length of wave 1 to the end of wave 4 in order to look for equality of waves 1 and 5. As the Elliott Wave Theory teaches, equality of wave 1 and 5 is a common target and it was correct once again. The question is: what’s going to happen next? Well, we know that after a five-wave impulse, always comes a counter trend move in three waves which we, Elliott Wave Analysts, like to call ABC correction. As you can see from the chart, it looks like wave red (A) is already completed, meaning that wave (B) should be in progress and perhaps finished after a final moved down or might get quite tricky and per-haps shape in the form of a triangle. We are then expecting wave (C) which always unfold in five sub-waves and it’s usually quite clear to identify. We are then expecting some resistance around the 1.595 level where we may seem a reversal taking place and a further continua-tion to the downside, which will result as a great trading opportunity for the next weeks and months to come. Be humble and trade wisely!
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