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AUD/USD In A Double Zig Zag Correction; Upside Risk Projections
Written by article default Tuesday, 01 February 2011 16:09
AUD/USD
- AUD/USD is in a double zig zag, as seen in the 4H chart above. We are in the Y of WXY, so the second part of the double zig zag. If a = c, and W = Y, we should see resistance where the market is now, right under parity. where you also have 61.8% retracement from the decline since the start of the year.
- However, just looking at the second zig zag, if c = 161.8% of a, the market would be at 1.0180. That is the maximum risk projection of this double zig zag as it is also near 78.6% retracement level (1.0160), and the market should really not break above that if the is be a correction decline.
- Otherwise, AUD/USD still looks bullish in the daily chart below. The short-term bearish outlook has run its course, and the intermediate term bullish mode remains.
- The daily shows the RSI still staying above 40, and a break above 60 suggests bullish continuation. Let’s see if the current rally will swing to 1.0160, or possibly a tad higher like 1.0180, in the short-term.
- From there, if there is topping, we need to see if clear back below 1.0, and then we can consider another correction decline swing down to 0.9750, 0.9700, and possibly 0.9550 area.
Is the Aussie recovering from the reaction to the flood, or is the rally a correction to further bearish attempts? We would love to hear what you think.