May 12, 2011 – AUD/USD’s AB=CD Retracement Versus the Triangle Scenario
Simple Moving Average(SMA) 200-period (bold, gray)
RSI-14 with Simple Moving Average 5-period of RSI attached.
Elliott Wave Principles
Market and Price Action (patterns, candlesticks)
Intraday pivots and Intermediate-term support and resistance
Multiple Time-frame Analysis
AUD/USD Nearing Apex of Short-term Triangle (5/9)
Forex Notes (5/11)
– The AUD/USD has been in a correction rally from 1.0540 to 1.0890.
– The ability to break above the 61.8% retracement, and break the bearish momentum in the very short-term shown in the 1H RSI breaking above 60, make the ab=cd, or zig zag scenario less likely.
– In fact the 4H chart shows that the market is at the moment deciding whether to be consolidating in a triangle, or a more of a harmonic retracement structure like ab=cd, or in Elliott Wave terminology an ABC correction.
– The 4H chart also shows the RSI remaining below 60, reflecting maintenance of the bearish momentum in the short to medium term.
– On one hand, the recognition of 200 SMA and a rising trendline can keep the market in a triangle. In this scenario, a classic 5-wave count can be anticipated ie. ABCDE.
– A zig zag scenario, which should see a crossover below the 4H SMA 200, has a swing projection target to the 1.0415 pivot and possibly the 1.04 clip. In this scenario, the 4H RSI reading should dip below 30 to confirm with bearish momentum.
– An immediate break back above 1.0715 suggests the triangle scenario and some further “coiling” this week.
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Fan Yang CMT
Chief Technical Strategist