AUD/USD: Trades Above 0.7550 After Recovering From Bottom
EWM Interactive | Jun 23, 2016 06:13AM ET
AUD/USD is trading above 0.7550 after recovering from the bottom at 0.7144 registered on May 24th. A rally of more than 400 pips is surely making the bears nervous, especially following the sharp sell-off from 0.7835. This is an excellent example of the fact that traders should never rely solely on the continuation of a trend, because no trend lasts forever. Instead, a forecasting method should be used to warn and prepare you for the upcoming change before it is too late. The method we use is called the Elliott Wave Principle. Does it work?
Probably the Wave principle’s most basic rule states that every five-wave impulse is followed by a three-wave correction in the opposite direction. So, when we recognized an impulsive decline from 0.7835 to 0.7144, we knew the recovery in progress was likely to extend much higher. As visible, we assumed it was going to develop as an (a)-(b)-(c) zig-zag and reach around 0.7550. The above-shown chart was everything we needed to form that bullish opinion.
Wave (a) climbed to 0.7504, where wave (b) began. It bottomed out at 0.7285 and gave the start of wave (c) up, which seems to be in its final stages now. Three weeks later, AUD/USD is still going according to the Elliott Wave analysis, demonstrating the Wave principle’s ability to help traders predict more than just a single market move. In this case, three waves in a row and still counting. How many other forecasting methods can offer the same?
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