Mar 062012

In my Elliott Waves update on the Australian Dollar posted in MarketWatch on 6 Febuary 2012, I had discussed my medium-term outlook for the AUD/USD. You might want to read that first.

The decline from the high of 1.0856 seen on 29 Feb is looking impulsive,but there is just a small chance that we could find some support around 1.0450/70 levels. Between 1.0450 and 1.0380 I would recommend that you don’t get involved. If you see a direct recovery towards 1.0620 you might consider a small short for a dip down to the 1.0480 levels. Only after we break down below 1.0380, the key level mentioned in my post on Wall Street Journals’ Market Watch should we start looking for where to sell aggressively for the medium term target below 0.8800.

If you would like to learn how to use Elliott Wave analysis, you should check out my book “Five Waves to Financial Freedom”

  27 Responses to “AUD/USD Outlook – Elliott Waves”

  1. Hello Ramki

    Finally, I have read your book. I had a problem with downloading it on my PC.
    In my opinion a very useful book because it contains practical techniques of the trade. Unlike other books on the EWP, which describe the rules of marking charts. I’m recommending it to all my friends who use the EWP in their trading.

    I also have a question about your last forecast for AUDUSD pair. Do I understand what you would expect a flat correction to 1.0450. Then restore the last peak above 1.0860. And only then we will see a sharp downtrend.


    • Hi Alexander, Thanks for your comments about the book. The potential dip to 1.0470 may well have already finished at 1.0505 (with complex corrections we never know until later). If it goes above 1.0700 now, it would have reached a reflex point as exlained in the book. Unless it comes below 1.0580 directly, I wouldnt like to be short for now, rather would prefer to stay on sidelines. The comment on MarketWatch is more relevant for you. Best of luck.

  2. sir when we see ur posts about gold and curde oil?

  3. Hi, thank you for this very helpful blog.

    I have a question about AUD. I read your Market Watch article, not yet your book.
    The question is about complex corrections.
    In Market watch you say that the leg down to 0.93xx at the end of 2011 could just be wave A. This means we’re now in wave B, then possibly a wave C to 0.88.
    Wave B has been so far a 4 waves leg. Is there an expectation of how wave B should be?
    Even the correction we’ve seen this week doen to 1.505 has been a 3/4 waves so far. Why not a 5 waves?
    Probably I have to read the book! :DD

    • Hi Luca, welcome to the club. B waves should be 3 wave formations. Inside the B wave there is minor abc. The minor c is made up of 5 waves. Hope that clarifies. The book will give details after which u could refer to the hundreds of charts in this blog as more examples

  4. I got the book, and I’m studying it.
    Very helpful and clear. Thank you very much.

    I see your point in why this should be, the end of wave B/beginning of wave C of a bigger correction that will drive down to 0.88.
    Some “others” are interpreting, as you say in your article, this move up as wave 3 of 5 and not as a complex correction. So in this case we would now be in wave 4 of 5.

    Does this last 3 weeks price movement look like an irregular correction wave 4 (from the top of the extended wave 3)? Just looking into the 5 wave stand point.
    So from the top of 3, we had wave A in 3 waves, then B that went beyond the top of wave 3 by a few pips, and now wave C that will be a 5 waves move, possibly to a 38.2 retracement of wave 3 around 1.04769.
    Only thing is the B that extended a few pips beyond the previous high of 3 on the 29th of February is made of 5 waves. B should be 3…

    I’m studying. Thank you for your help.

    • Hi Luca, you are doing the right things by figuring out a count following the guidelines in the book. Now you should watch to see how it unfolds. Wheher it works out or not, you would have learned from the experience. Over time, you will get better, much better. Good luck.

  5. Superb analysis of aud.

  6. Hi,

    I like you Elliott wave count about aud/usd
    im agree with you

    Thank you

  7. sry the disturbance Dott Ramki,
    believe that if the cross aud usd falls in the way that you described the cross eur usd will fall ……….to??

    • Dott Luca, It is human nature to hope for a move that will suit us. I havent looked at these currencies in a few days. But what you say seems to make sense.

  8. Since Minor C has abc count. Currently we are in b and b have 5 waves. What I see now is that AUD/USD has completed 2nd wave in Minor b and best entry at begining of wave 3 at 1.04800 (end of wave 2) since Wave 3 has commenced has completed 1st sub wave at 1.04850. If it is corret next stop 1.0950~1.1 in 7 days. I hope I got it right.

  9. Hello Ramki,

    Thank you for the post about the Russian index MICEX.

    I am closely watching the currency pair AUDUSD. I do not think that the downward movement is impulse. It seems to me one more leg down and we’ll see upward movement. Do you have changed your opinion on the marking of the pair?

  10. Dear Ramki

    With recent posting on NZD/USD, i see similar pattern in AUD/USD pair, where double Zig-Zag is forming with intervening X between two Zig-Zags, am I right so far ?

    If this is true, I see that NZD wave 3 (of A) completed on 23/May at >200% of wave 1 & wave 2 while in the case of AUD wave 3 (of A) completed 1/June at <138% of wave1 & 2. If this observation is correct, should we be anticipating an extended AUD wave 5 once wave 4 is complete ? And again by theory wave 4 should not be moving up to breach wave 1 @ 1.0225 on 10/Apr ?

    Hope i am making sense, please correct me if i am going from somewhere

    Thank you

    • Hi Umesh, forgive me for being unable to coach individually. I just dont seem to have sufficient time. Briefly it is OK to have your own counts. Just be sure to know where and when your count will be proved wrong (and there is nothing bad about being wrong, because every single person will be proved wrong sooner or later, and until that point is reached, we have to stick with our own counts). I urge you to go back and revise my book to reinforce your understanding of the rules/guidelines so that you can remian faithful to YOUR OWN count. Good luck

  11. Many thanks dear Ramki,

    I have read your book number of times and each time I find it so much enriching and reassuring


  12. what’s next ramki?. wave 5 now?

    • Hi Mild Sev, Try connecting the tops 1.1075 and 1.0780 to draw a line to the right. Then draw another line connecting teh lows at 0.9386 and 0.9580 and you will probably see a potential triangle. But bear in mind that a triangle is valid only when it is resolved. Yet, it is a useful concept to keep in mind to figure out a low risk trade if the wave counts from 0.9580 can be shown to finish near the triangle’s top. Good luck

  13. Hi Ramki
    Wave A as stated. Wave B(?) finished with wave 4 of c (of B) at a fib of wave 3 to start of wave 1. Then from the 3 March to 1 June we had an ABC correction (more complicated wave B unfolding?) and it looks like another overlapping correction going up? I would have expected this to have been a wave c of B? Can u give us some views on how u tackle a situation like this. Thanks!

    • Hi Trevor, Connect the tops as well as the bottoms and perhaps we will get a triangle? Complex patterns are usually hard to decipher and trades have to be for teh short term only, with suitable stops

      • Hi Mr R

        This is developing quite nicely now. A move down “wave C” of E and a thrust higher. Here is a nice story unfolding for your pupils! Actually it looks as if Wave A equals C but there is another corrective wave in progress, wave x?

        • Your book is really helping me nail some of the stuff (not quite financial freedom yet!)
          The wave “X” or “B”, (of c of Wave “E”) had its internal wave “c” moving exactly 150% of its wave “a”. So if we have equality between wave “C” and the ensuing move down from wave “X” then the reward is perhaps AUD 1.0000 from the double top at AUD1.04. The internals of wave “C” counted five waves and the double top served as tight stop for a massive risk reward ratio.

  14. Hi Mr R

    Here is a very interesting question. What is more dangerous to your wealth than trading a complex wave 4? Its trading wave 5 and then finding out to your horror that it has just breached wave 1! Re the recent action in the AUD.

    • HI Trevor, I would say trading without knowing in advance where one’s analysis is going wrong is the real danger. Any trade idea is a hypothesis. (If someone thinks an analysis is market forecast, he is sadly mistaken). We start with a hypothesis, and we should know exactly where that hypothesis will be proved wrong. Most beginning traders make this mistake. We need to know in advance where our hypothesis will be wrong. Entering the trade nearest to that critical level where it will be proved wrong is the key to smart trading. And that is what I am trying to teach here.

      • Hi Mr R

        That should read trading the complex wave 4 and it carries on going up thru the bottom of wave 1 (as disallowed thru EW)

        You made a comment on your exclusive club (which seems to be taken off now) that the very successful traders only trade on a few setups. I now understand what/where those setups are. The light bulb has finally flashed. I have been trading like an idiot making the brokerage people rich.
        Thanks for the input.

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