**AUD/USD Technical Analysis: Deeper Dive into the Elliott Wave Structure**
*Adapted and expanded from ActionForex.com, original analysis by ActionForex contributors*
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**Overview of the AUD/USD Current Market Structure**
The Australian Dollar versus the US Dollar (AUD/USD) is a prominent major currency pair, and its analysis often hinges on a combination of technical, fundamental, and sentiment factors. Over recent trading sessions, the pair has displayed notable volatility as traders assess shifting expectations around interest rates, global economic health, and relative developments in both Australia and the United States.
One popular approach to analyzing these market movements, as featured in the referenced ActionForex article, is through the Elliott Wave theory. This method seeks to decipher probable future price action by identifying recurring wave patterns in the market. Here, we will comprehensively explore the current Elliott Wave interpretation of AUD/USD, complement this insight with additional technical and macroeconomic perspectives, and present a thorough overview of potential price pathways.
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**Current Elliott Wave Analysis of AUD/USD**
The latest structural analysis suggests that the AUD/USD pair is positioned at a critical juncture in its medium-term wave cycle, with implications for future price direction. Based on classic Elliott Wave principles, here’s how the current landscape unfolds:
– **Representation of Wave Structures**:
– The chart displays a completed impulse sequence (five-wave advance) from the 0.6170 October 2022 lows.
– The recent price action suggests that this larger advance has culminated, and the pair is now retracing as part of a corrective (primarily A-B-C) structure.
– **Implications for Traders**:
– Price action is currently dominated by a corrective sequence that may potentially run deeper before a renewed impulsive movement begins.
– Understanding corrective patterns is crucial for both swing and position traders to identify probable reversal or continuation areas.
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**Breaking Down The Elliott Wave Count**
A detailed breakdown per the Elliott Wave Guidelines, combining ActionForex analysis with industry best practices, is as follows:
– **Primary Wave Count:**
– **Wave 1:** Began from October 2022 lows, extending sharply higher and forming the first leg of the five-wave sequence.
– **Wave 2:** A relatively shallow retracement, indicative of underlying bullish momentum.
– **Wave 3:** Extended as typical for third waves, the rally was marked with strong bullish sentiment.
– **Wave 4:** A complex corrective structure, visible as a consolidation rather than a sharp decline.
– **Wave 5:** Climbed to the most recent swing high, where significant resistance was encountered.
– **Corrective Sequence:**
– With the impulsive five waves completed upward, the following correction is labeled as A-B-C.
– **Wave A:** The initial sharp drop, representing the first leg of the correction.
– **Wave B:** A rally that recovered part of Wave A’s decline, but failed to reach prior highs.
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