GBP/AUD Found Buyers After Elliott Wave Zig Zag

Technical analysis of Forex market

Hello fellow traders. In this technical blog we’re going to take a quick look at the Elliott Wave charts of GBPAUD, published in members area of the website. As our members know, we’ve been calling rally in the Forex Pair. The pair made pull back that has had a form of Elliott Wave Zig Zag pattern. We expected GBPAUD to find buyers at the extreme zone from the 08/20 peak. In the further text we are going to explain the Elliott Wave Pattern and trading strategy.

Before we take a look at the real market example, let’s explain Elliott Wave Zigzag.

Elliott Wave Zigzag is the most popular corrective pattern in Elliott Wave theory . It’s made of 3 swings which have 5-3-5 inner structure. Inner swings are labeled as A,B,C where A =5 waves, B=3 waves and C=5 waves. That means A and C can be either impulsive waves or diagonals. (Leading Diagonal in case of wave A or Ending in case of wave C) . Waves A and C must meet all conditions of being 5 wave structure, such as: having RSI divergency between wave subdivisions, ideal Fibonacci extensions and ideal retracements.

GBP/AUD Elliott Wave 1 hour chart 09.02.2021

At the chart below we can see what Elliott Wave Zig Zag pattern looks like in real market. Pull back reached equal legs at 1.86718-1.84997 (buyers zone). First leg of the– A red, has subdivided into 5 waves. Then we got B red that has form of Triangle Structure. Finally doing C red that should have 5 waves. Currently we can be doing ((iv)) of C red. Once bounce completes another leg down within blue box should ideally follow . We don’t recommend selling the pair and favor the long side from the blue box area. Once bounce reaches 50 Fibs against the B red high, we will make long position risk free ( put SL at BE). As our members know, Blue Boxes are no enemy areas , giving us 85% chance to get a bounce.

GBP/AUD Elliott Wave 1 hour chart 09.02.2021

The pair made another wave down within blue box area and found buyers as we expected. We got nice reaction from the blue box, which reached and exceeded 50 fibs against the connector, so any long trades from the blue box should be risk free at this stage. Cycle from the peak is counted completed at 1.85187 low. Now we would like to stay long from the blue box and not forcing new trades , until 08/20 peak gets broken. In that case GBPAUD will have again bullish sequences and will offer new long opportunities in 3,7,11 swings.