The following present a good bearish intraday setup on AUDUSD based on 27 February AUDUSD Elliott wave setup. We expect price to stay below 0.7775 as the bearish drive gathers momentum.
27 February, AtoZForex – In the last Elliott wave update on AUDUSD, we noticed that price was advancing in a typical impulse wave. It was only a matter of time before a bearish correction surfaced. We projected 0.7775 and expected price to stay below if the bears would have any chance soon. The chart below was used in the last update.
We had quoted thus:
The rally from the beginning of the year is an impulse wave as can be seen from the chart above. A bearish correction to 0.745-0.736 is imminent. Price can reverse below or at 0.777. A break below the broken line in the chart above will be an early signal.
Also important, is the pattern that’s to complete the impulse wave. Elliott wrote about the spiral nature of the markets. The 5th wave of this impulse is expected to exhibit a motive wave. It looks like an ending diagonal has surfaced. The chart below shows the sub-waves count of the 5th wave of the impulse wave above.
The chart above shows the ending diagonal sub-wave 5 of the impulse wave. Ending diagonals are sub-divided into 5- waves each comprising a-b-c structures. Ending diagonals are known to terminate a dominating trend or correction. How can an intraday trader makes use of this information?
27 February AUDUSD Elliott wave setup: intraday view
The chart below is the hourly wave count of the Aussie and the likely intraday move.
The chart shows price breaking briefly out of the ending diagonal. Ending diagonal breakouts are well known to be of high momentum. The breakout was good and there was a pullback to the 50% retracement of the move. Price is presently between 0.7710 and 0.7659, a break above or below respectively will indicate where the nearest direction will be. We favor a break below 0.7659 for price to reach 0.758 and below. A break above 0.7710 will lead price toward 0.7745 and if strong, to 0.7775.
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