AUD/USD: Forecasting The Decline After Elliott Wave Double-Three Pattern

In this text we’re going to take a quick look at the Elliott Wave charts of the AUD/USD pair. As our members know, AUD/USD is showing lower low sequences in the cycle from the Feb. 25, 2021 peak. Recently we saw recovery, which has unfolded as an Elliott Wave Double-Three pattern. We’re going to explain the forecast, the Elliott Wave Pattern, and our trading strategy.

Before we take a look at the real market example, let’s explain Elliott Wave Double-Three pattern.

Elliott Wave Double-Three Pattern

Double-Three is a common pattern in the market, and it is also known as a 7-swing structure. It’s a reliable pattern which has been giving us good trading entries with clearly defined invalidation levels.

The chart below presents what the Elliott Wave Double-Three pattern looks like. It has (W), (X), and (Y) labeling and a 3,3,3 inner structure, which means all of these 3 legs are corrective sequences. The (W) and (Y) points are made of 3 swings.

AUD/USD Four-Hour Elliott Wave Analysis - Jan. 2, 2022

AUD/USD presents a (B) blue recovery that is unfolding as an Elliott Wave Double-Three Pattern. The main characteristic of a Double-Three pattern is that all 3 legs have corrective sequences. The first leg, Wave W, has a clear 3-waves structure, illustrated as a zig-zag ((a)) ((b)) ((c)). Then we saw 3-waves pull back in the ((x)) connector.

Recently the pair has been moving the last leg up, which has also been unfolding as a zig-zag pattern. Recovery has already reached extremes at the 0.7278 area, and a turn can happen any moment. We recommend to avoid buying while favoring the short side as long as the price holds below the 1.618 Fib. level and as long as the 0.7559 pivot holds.

AUD/USD Four-Hour Elliott Wave Analysis - Jan. 8, 2022

Sellers appeared at the 0.72789 area, and we saw a positive reaction from there. The decline from the blue box reached 50 fibs against the X connector. As a result, readers who took short positions should be enjoying profits in risk-free positions.

At the moment, we see the wave (B) blue recovery moving to complete the pattern at the 0.7279 level. The decline from the 0.7279 high looks like a 5-waves pattern, which increases the chances that the next leg down is in progress. Currently we may be see a 3-waves bounce against the mentioned high. However, if the pivot at the 0.7279 level gives up, we may see a larger recovery.