AUDUSD Elliott Wave Analysis

Forex Pair : AUD/USD

Date : 22nd June 2020

Time Frame : 4 Hr

A-Leg In The Larger Degree

Let’s recap our AUDUSD Elliott Wave analysis on the Aussie when it began reversing and gaining strength on the 19th March 2020.

The first leg of the rally looks to have kickoff with a 5 wave “Leading Diagonal” chart pattern in the form of wave [1] in black.

This is followed by a wave [2] in black in the form of a shallow (W)-(X)-(Y) correction in blue that barely reaches the 38.2% Fibonacci retracement level.

Possibly signaling further upside in the 3rd leg of the Elliott Wave sequence.

Undoubtedly, the resulting wave [3] in black was pretty “Impulsive” in nature with only shallow pullbacks.

And with the “Law Of Alternation” as a guide, we anticipate that wave [4] might form a more extended corrective structure.

And that is exactly what played out with wave [4] in black forming an extended (a)-(b)-(c) flat type corrective structure in blue with a short (c) leg.

With the Aussie showing continual strength, the wave [5] in black ended with a flourish.

Completing possibly the first A leg in the larger degree.

B-Leg In The Larger Degree

As always, after any impulsive 5 wave moves, the markets tend to consolidate.

And we can always expect a sideways market to follow suit.

The subsequent sideways corrective structure that followed is a variation of the flat corrective structure.

Initially, I labeled it as an [a]-[b]-[c] in black as the [a] wave started off pretty impulsively.

But in hindsight, when the [c] ended in a 3-3-3 (a)-(b)-(c) manner in the lower degree.

I believe an [w]-[x]-[y] corrective structure might be more in accordance with standard Elliott Wave rules and regulations. 

And with the completion of this flat correction in the larger B degree, the Aussie took off again.

C-Leg In The Larger Degree

The forthcoming rally took shape in a 1-2-1-2 Elliott Wave pattern, resulting in a nested 3rd wave sequence.

Based on the current AUDUSD Elliott Wave analysis, the chart seems to be showing the possibility of a (w)-(x)-(y) correction with a complex (x) leg.

My expectation is that this (x) leg in itself is another (a)-(b)-(c) corrective structure with another complex (b) sequence.

Judging from the price action, I am inclined to believe that prices will continue to move slightly higher in the short term.

At least to complete the (b) leg in the lower degree and the [x] leg in the higher degree.

The magnitude of this short term rally should be similar to the length of (a) leg in the lower degree.

And upon the proposed completion, the Aussie will likely drop lower to complete the (y) leg of the correction.

And subsequently, the entire corrective wave [4] in black should technically be complete.

Please DYODD before taking any trades based on our AUDUSD Elliott Wave analysis.

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