AUDUSD Elliott Wave Analysis, One More Leg Up to New HighsAustralia projects a recovery from the pandemic footprints on the economy. The third quarter CPI announced 1.6% growth was beyond the expected 1.5% and more importantly the YoY CPI of 0.7% signalled an economic recovery of the state.
Despite the growing numbers, AUD was not able to overtake the US Dollar and continued the down slide this week and the pair yesterday only lost 0.92% against the USD. As the Election day gets closer, the volatility rises in the market, giving an edge to the US Dollar in spite of continuous losses of the US Indices and somewhat weak Core Durable Goods and CB Consumer Confidence.
The market awaits two key data to be published today from the US – GDP (QoQ) as per 3rd Quarter which is expected to reveal a significant 31.0% growth compared to the previous 31.4% loss and the Initial Jobless Claims to reveal 775K which is lesser than the previous months’ 787K by 1.52%.
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By the time of writing this article the AUDUSD on Overbit is traded at 0.70490 which is slightly above the dynamic support. The 4H chart of the pair has formed a triangle pattern and one more leg up is required to complete the 5-wave ABCDE correction.
A breakout from this triangle could trigger another round of impulse waves. The Daily chart on other hand signals the bearish continuation. The RSI divergence on a daily chart demonstrates the power of bears, whereas all bullish attempts are put to a stop lower than the previous.
Since the bullish impulse wave of March 19, AUDUSD has formed triangle patterns two more times, though they were not of a greater cycle as this last one, all two were then followed by another impulse wave, let’s see if this triangle also triggers an impulse of a greater Elliott Wave cycle.
Follow the economic updates and earnings of the US companies, as these are playing a great role on the US Dollar Index. Beware of volatility and trade with caution during the economic data announcements.