Thursday 16 November 2017

The Aussie close to a trough

Hi Traders,

The USDAUD (now at 0.7594) is getting close to the target area 0.7533-0.7439 where it could set off a new low before bouncing back to 0.773-0.783.


The best way to get the big picture is to look at the historical chart. The long term wave pattern from 1983, as well as the shape of the past waves, are now indicating the direction and the shape of the long term trend.

If the AUDUSD sticks to the expected Elliott Waves, it could reach a minimum close to 0.61 within 5 years. Within 10 years, it might bottom around 0.48 or lower.

Let me recall a few historical facts. In 1967 the AUD was pegged to the USD at the rate of 1.12 USD and, on Sep 9, 1973 it was adjusted to a fixed rate of 1.4885 USD

On Dec 12, 1983 the AUD was finally floated and it started a downtrend immediately. On Apr 2001 it reached the lowest low at 0.4775 USD.

The historical chart below reveals that, from that low in 2001, the Aussie performed an a-b-c retracement up to 1.1080 (July 2011) followed by a downtrend that it's still in the making.

This large a-b-c was just the retracement-wave-4 of a massive five-waves-downtrend started in 1983. That downtrend is not even half away.

Besides, the monthly and weekly charts cast doubts about the last top at 0.81. In fact, after the incoming new low, the Aussie could still stage a surprise jump to 0.85 before resuming the main downtrend.

The weekly chart also reveals the incoming targets and so the daily chart.

Historical chart. Click to enlarge

Monthly chart. Click to enlarge

Weekly chart. Click to enlarge

Daily chart. Click to enlarge

4-hours chart. Click to enlarge