Elliott Wave Analysis: Aussie Can Stabilize In 2nd Half Of 2022 On Hawkish RBA
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Aussie is trading south for the last few weeks with room for more weakness as we think that drop from 0.7660 is impulsive. As such, we think this is going to be a five-wave drop, thus more weakness can be seen after the wave four rallies, which has a nice resistance at 0.7180, around minor swing highs, and a perfect 38.2% Fib retracement level. So we are staying bearish as long as the price trades below 0.7390 as wave four must not trade into the territory of a wave one.
Ideally, the weakness from the start of April belongs to a higher degree of corrective set-back from 2021 highs which can stop this year around the 0.6900 area especially as RBA sees a lot more rate increases in the months ahead. So at some point policy gap between RBA and Fed will narrow which can be a catalyst for a bounce on Aussie in the second part of 2022. Bounce on stocks would also be very positive for the Aussie.
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