Trading has slightly changed in recent years, and most traders have moved from Forex towards Cryptos. I won’t blame anyone since I also focused somewhat on crypto in the last year, but today I found a great play in FX, so I want to share it with others. The pair that has been on the top of my radar lately is AUDUSD, this is one of the pairs I love, and it’s following technical study to the point, so let’s dive into the reasons why the AUDUSD should be on the top of your watch list.

AUDUSD Elliott Wave Research

After a nice bull run from 0.5509 lows (March 2020) towards 0.8000 highs in early 2021, we can call the motive pattern complete; we are labelling this move as a completed five wave structure that ended larger wave [A] (white on the chart). We have seen a four-leg so far from 0.8000 zones, so one more leg to complete the first leg (A) (yellow on the chart) of the larger [B] wave (white on the chart). We are going with the primary idea that the yellow (A) wave is taking the shape of a leading diagonal, so while we remain below 0.7890 (end of wave 2 green), our focus will go towards one more dropdown towards the 0.7000 regions. On the 4-hours chart of the AUDUSD, we can see a three-wave structure (labeled a-b-c red), the pattern looks like a Zig-Zag pattern (5-3-5), and with equal legs already being tested, we can start focusing on the bearish plays right away. For resistances on the upside, we can watch a test of the trend line from the start of wave (A) yellow throw the end of wave two green and 127.2% of red [c]=[a].

Alternate Count: We are going with the idea of a potential FLAT (3-3-5) correction inside wave [B]. Break above .7800 can be the first sign of this idea, but the final level would be invalidating the primary count at 0.7890. This count also suggests a similar scenario; while we remain below 0.8000, we can expect to see one more dropdown in wave ( C ) yellow as a 5-wave structure.

Quick Research Data To Know About AUDUSD

AUDUSD pair has an average of 60-65 pips move per day, that’s around 0.85% daily change; with that said, we are looking for this trade to last for a while, for day trading stick with taking 40-50 pips top per day and you should be fine.

One of the reasons why I love this pair is that it’s moving the entire day, yes we are going to have the best plays around US session around the news events from the US, but this pair can easily be traded during UK and ASIA without a problem.

My Game Play For AUDUSD

With an AUDUSD pair showing an excellent three leg structure from 0.7109 lows, my focus is to build a short position for day trading and swing trading accounts. The main play will be against the .7890 invalidation point, but until we confirm the end of wave 4 (green on chart), the maximum risk will be .50%. The first confirmation that we are on the right track will be a break and close below the 4H channel of the [C] leg (pink on the chart) and aiming for the motive structure of the highs. This bearish trend should last for a while, seeking to add bearish positions on every 5-3 setups against the w.4 highs as long as my risk doesn’t break 1.5%. For targets along the way, we can use the end of w.3 (green on chart) 0.7109 and 50% of the larger wave
[A] 0.9999.

For traders that like hedge trades, you can always use Copper or USDCAD to hedge this play.

Enjoy your trading,
Nicola Delic

Disclaimer: * Your trading results will vary from your knowledge and reaction. Making money trading Forex or any other market requires a lot of time and hard work. We can’t guarantee any earnings from these forecasts as the factors that impact them are numerous and uncontrollable.

Quick Update

The AUDUSD pair has been following our plan from day one, still wants to remain bearish towards the 0.7100 lows. Gameplan remains unchanged; pullbacks short play stay the best option.