Tuesday, 22 May 2012

AUDUSD, Tuesday May 22, 2012

Hi Traders,

As predicted, the AUDUSD stopped  the downtrend at 0.98 USD as displayed in the monthly chart below. Theoretically, given the new temporary USD weakness against all currencies, we could see the Aussie very last rally to 1.0220-1.0450 and maybe to 1.0760 before starting the big downrend.

If this happens,it would complete "every wave 5" of major, medium and minor grade. See the 4 waves in white at the top right end of the chart.

As a confirmation we have the channel being touched 4 times, so we expect a small rally followed by a breakout to the downside

In the weekly chart below there's a bullish reversal candlestick formation called "the three crows" confirmed by the chart touching the channel at level 0.98 USD which is also a 61.8% retracement down of the last rally. From here we should start the very last wave 5 up.

The daily chart below shows the "engulfing" reversal candlestick and this confirms the level 1.0220 as possible tartget. The last wave down (C) was performed in 5 waves and should be finished.

Finally, the 4hour chart below shows the new trend direction and the possible tartget at 1.0220 (red line)

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