Elliott Wave Analysis: AUDUSD And NZDUSD

Grega Horvat

AUDUSD made a nice recovery and has stopped near 0.7440 where we are waiting on top confirmation of a corrective bounce. This would be confirmed if we get a drop back to 0.7370.

AUDUSD 30 Minute Chart

AUDUSD 30 Minute Chart

NZDUSD is showing us a new intra-day rally in play, which could be the first indication of a completed ending diagonal in wave 5. If that is the case, then more upside may follow in the near-term and a minimum three wave recovery. Now, we see price trading in the first leg A as part of a three-wave rally. Upside for the whole three wave A-B-C recovery may later be around the previous swing four at 0.7088 level.

NZDUSD 4 Hour Chart

NZDUSD 4 Hour Chart

The ending diagonal is a special type of motive wave that occurs primarily in the wave 5 position when price has moved too far and too fast. Some ending diagonal triangles appear in the C wave of an ABC correction. In all cases, the ending diagonal terminates the move of larger patterns. They consist out of five waves, with each having three more sub-waves and they usually suggest sharp reversals.

An Ending Diagonal Pattern

An ending diagonal pattern

Source: www.ew-forecast.com