Support from an 18 year trendline and the short term wave pattern strongly suggests that the EURAUD is forming a multi-year bottom.
Monthly charts provide much needed big picture perspective . The July, August, and October 2007 lows touched and reversed at an 18 year support line (drawn off of the February 1989 and August 1997 lows). A line that connects the October 1998 and December 2002 highs provided resistance throughout 2006 and early 2007. False breakout signals occurred from August 2007 to January 2008. The next test of the resistance line likely leads to the real breakout. Be sure to visit the Elliott Wave forum for trading ideas and updates to this pattern.
The advance from 1.5491 to 1.7159 is a clear 5 wave advance. A 3 wave (A-B-C) corrective decline will likely resolve itself in the next few weeks. Wave iv of C could reach 1.6300/20 before wave v registers the C wave low, perhaps close to the 161.8% extension of A; at 1.5846. It is near this level that longs should be established, against 1.5491. The rally that ensues should exceed 1.7159 and may be the beginning of a much more significant multi-year rally.
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