Thursday, 21 April 2016

AUD/USD 7 year cycle still pointing up but 5 waves up says rally needs a breather

The AUD/USD 7.x year cycle and recovery back above key trend line support on the monthly chart have had me bullish since the beginning of the year (for example see here), and I currently see no reason to expect anything other than higher levels later in the year. Here is an updated monthly chart:



Zooming in to the daily chart now shows a five wave rally, which should be close to completion, and may be complete already. Subsequently a correction of the rally should be seen, with the area of wave 4 being a common target, so 0.75, before a rally to fresh highs begins. A bearish alternate count would view the action from the September low as a flat correction nearly complete now, to be followed to a move below the 2015 low. Let's see. Bottom line is, expect weakness soon, but so long as monthly closes remain above the nearby trend line on the monthly chart, favour higher levels later in the year.


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