Elliott Wave Analysis: AUDUSD and German DAX
AUDUSD made a nice reversal the past week from the 0.7525 level following Janet Yellen’s press conference. As we can see on the chart, price completed a three wave rise within the final wave E of a complex correction. Sub-wave C unfolded as an ending diagonal, which usually reacts as a sharp turning point lower, meaning more weakness should be now in store for the pair.
As we can see on the 4h chart, price moved nicely to the downside and is now trading around the 0.7233 area, probably at the start of the final wave 5), after a three-wave minor corrective move unfolded in the past wave 4). If price stays slow and overlapping than market could still be trap in a correction, but if we see a decisive break beneath the wave 3) low then we could be in for more weakness within wave 5).
A sharp turn up on DAX from 10020 area was clearly an impulsive price move, based on personality and structure which confirms a completed correction from August highs. As such this impulse was labeled as wave 1, then followed by a minor complex correction in wave 2 that found a support at 10400 level. Current strong uptrend is now wave 3 which is trading around the 11444 area, and could in days ahead find a temporary top.
Now we see price trading in sub-wave v of 3, that could see a possible reversal in sessions ahead into wave 4.
German DAX, 4H
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