AUD/USD nears the end of bullish Elliott Wave pattern

Talking points

• AUDUSD bears the completion of Elliott wave impulse pattern.

• Aussie decline to .6460-.6580 is considered "normal".

Current Elliott Wave count

Just one week after the street is expecting several rate cuts by the Fed in 2024, AUDUSD has accelerated higher. However, these highs simply suggest the end of a completed Elliott wave impulse pattern.

Beginning October 25, AUDUSD began to rally in an Elliott wave impulse pattern. The impulse is marked with five waves labeled i-ii-iii-iv-v.

The first four waves of the impulse pattern appear in place and we are nearing the end of the 5^th wave. It appears AUDUSD is in the 5^th of a 5^th wave as our RSI oscillator is indicating bearish divergence. Under this count, the current rally is a terminal wave and is about to turn lower.

The market’s geometry is highlighting multiple wave relationships near .6790 but the market does not have to stop there.

Once this Elliott wave impulse pattern expires, Aussie will experience its largest decline since October 25. This decline could carry prices down to .6460-.6580 which is over 200 pips from today’s pricing.

This incoming decline is viewed as a corrective decline and should only partially retrace the October-December uptrend. AUDUSD pricing should remain above the October 25 low at .6270 under the wave count.