Tonight in the overnight trading session, the Reserve Bank of Australia (RBA) will release the interest rate decision. The analysts’ consensus expects the RBA to keep it unchanged at 1.50%. Despite this macroeconomic event, our goal for this article is to apply the Elliott Wave Theory we have learned up to now.
The Big Picture
In the AUDUSD daily chart, the price action looks sideways. To ease our study, we will divide the analysis into two parts. The first part is a bullish sequence from the January 20th, 2016, low at 0.68279, until January 28th, 2018, high at 0.81358. If we apply the concepts of labelling (read more) we could assign it an intermediate wave degree, which we label as (A), (B), (C), (D), and (E). Consider that, at the moment it is not the purpose of this article to define which is the right name of this corrective structure. As a result of this examination, we observe that the price bias for the pair AUDUSD is bearish.
The second part of the analysis is from 0.81358 to date; this section looks like a bearish motive wave which looks like a downtrend continuation. To ease the comprehension, we refine its study in the 4-hour chart.
The 4-Hour Chart
The AUDUSD in the 4-hour chart, in its corrective sequence between (A) and (B), presents two minor A-B-C sequences. Finally, between C and B, the Aussie shows five internal waves.
In the 1-hour chart, we observe that the five-wave sequence is incomplete. The AUDUSD might move to a new lower low in the 0.692 area approx. The invalidation level for this scenario is 0.70610.
Please note that the price is not forced to move as our forecast suggests. The charts published corresponds to the Elliott Wave Theory application.