Commodity currencies have been in the decline this year against US Dollar as a result of market’s expectation of the Fed’s rate hiking cycle. A falling Australian Dollar will make imported products more expensive, resulting in price increase and adding to existing inflationary pressure. The higher the inflation rate, the faster the Reserve Bank of Australia (RBA) need to bring forward the first increase in cash rate. The Melbourne Institute monthly inflation gauge rose by 0.3 per cent in November to be up 3.1 per cent on the year. A sustained build up in inflation will bring forward the tightening cycle which then should eventually provide support in the Australian Dollar. In the meantime however, the Australian Dollar can continue to see selling pressure against US Dollar as a result of the divergence in monetary policy.
AUDUSD Daily Elliott Wave Chart
Daily chart of AUDUSD above shows a 5 swing incomplete sequence from February 25, 2021 high favoring further downside in the pair. The entire decline can be counted as a double three Elliott Wave structure where wave ((W)) ended at 0.7106. Pair then rallied and ended wave ((X)) at 0.7556. It has resumed lower and broken below the third swing, suggesting the next leg lower has started. This pattern suggests further downside in the pair as long as rally fails below 0.755. Potential target lower for swing #7 is 100% – 123.6% Fibonacci extension of the swing #3 which comes at 0.645 – 0.666.
AUDUSD 1 Hour Elliott Wave Chart
1 Hour Asia chart above shows that pair could see another leg lower to complete wave 5 which then should end wave (A) and complete cycle from October 29, 2021 high. Afterwards, pair should rally in wave (B) to correct cycle from October 29 high before turning lower again. Alternatively, pair might have already ended wave (A) and in the process of doing larger degree rally to correct cycle from October 29, 2021 high before it resumes lower again.
FURTHER DISCLOSURES AND DISCLAIMER CONCERNING RISK, RESPONSIBILITY AND LIABILITY Trading in the Foreign Exchange market is a challenging opportunity where above average returns are available for educated and experienced investors who are willing to take above average risk. However, before deciding to participate in Foreign Exchange (FX) trading, you should carefully consider your investment objectives, level of xperience and risk appetite. Do not invest or trade capital you cannot afford to lose. EME PROCESSING AND CONSULTING, LLC, THEIR REPRESENTATIVES, AND ANYONE WORKING FOR OR WITHIN WWW.ELLIOTTWAVE- FORECAST.COM is not responsible for any loss from any form of distributed advice, signal, analysis, or content. Again, we fully DISCLOSE to the Subscriber base that the Service as a whole, the individual Parties, Representatives, or owners shall not be liable to any and all Subscribers for any losses or damages as a result of any action taken by the Subscriber from any trade idea or signal posted on the website(s) distributed through any form of social-media, email, the website, and/or any other electronic, written, verbal, or future form of communication . All analysis, trading signals, trading recommendations, all charts, communicated interpretations of the wave counts, and all content from any media form produced by www.Elliottwave-forecast.com and/or the Representatives are solely the opinions and best efforts of the respective author(s). In general Forex instruments are highly leveraged, and traders can lose some or all of their initial margin funds. All content provided by www.Elliottwave-forecast.com is expressed in good faith and is intended to help Subscribers succeed in the marketplace, but it is never guaranteed. There is no “holy grail” to trading or forecasting the market and we are wrong sometimes like everyone else. Please understand and accept the risk involved when making any trading and/or investment decision. UNDERSTAND that all the content we provide is protected through copyright of EME PROCESSING AND CONSULTING, LLC. It is illegal to disseminate in any form of communication any part or all of our proprietary information without specific authorization. UNDERSTAND that you also agree to not allow persons that are not PAID SUBSCRIBERS to view any of the content not released publicly. IF YOU ARE FOUND TO BE IN VIOLATION OF THESE RESTRICTIONS you or your firm (as the Subscriber) will be charged fully with no discount for one year subscription to our Premium Plus Plan at $1,799.88 for EACH person or firm who received any of our content illegally through the respected intermediary’s (Subscriber in violation of terms) channel(s) of communication.
Recommended Content
Editors’ Picks
USD/JPY holds positive ground around 151.50 following Japanese CPI data
The USD/JPY pair holds positive ground for the second consecutive day near 151.45 on Friday during the early Asian trading hours. The cautious approach from the Bank of Japan to keep monetary conditions accommodative exerts some selling pressure on the Japanese Yen.
AUD/USD depreciates on risk aversion amid a stronger US Dollar
AUD/USD extends its losses for the second successive session on Friday. However, market activity is expected to be subdued due to light trading on Good Friday. Meanwhile, the US Dollar strengthens as recent data indicates annualized economic expansion in the United States, driven by consumer spending.
Gold price finishes Thursday’s session set to reach new all-time highs
Gold price rallied during the North American session on Thursday and hit a new all-time high of $2,225 in the mid-North American session. Precious metal prices are trending higher even though US Treasury yields are advancing, underpinning the Greenback.
Top 3 Price Prediction BTC, ETH, XRP: Retail watches from the sidelines with a bias for shorts
Bitcoin is showing strength as markets head into the Easter holidays. As it rises, altcoins are following suit, with Ethereum and Ripple posting almost similar gains. Meanwhile, there remains an unfilled CME Gap, with a lot of liquidity also resting above and below BTC price.
Bears have been standing before a steamroller so far this year
Despite a pushback on rate cuts from Christopher Waller, and what was supposed to be cautious trading sentiment ahead of critical US inflation data released later on Friday, the S&P 500 rose on Thursday, marking its best first-quarter performance in five years.