Sunday, March 4, 2012


 Since I am inclined to believe that the triangle pattern might be invalidated, I want to present you with other  possible developments for this week. I think that  right now we might be in wave c of a flat formation. wave c might be equal to 0.618 times wave a, which is exactly where we closed on Friday. Second target for wave c will be 1.0670 area where wave c will equal wave a, and the third target will be 1.0590 area where wave c will be equal 1.618 times wave a. It would be amazing if we go bellow 1.06, because this would be an amazing buying opportunity. Of course if we do go below 1.06 we need to wait for clear reversal signal before we get commit to a buy position. If we get bellow 1.06 we might reverse around 1.0570 or we might get some extension to the wast wave and go closer to 1.05 area, and this is the reason why I would rather wait for a reversal confirmation before getting into a long position.

 In the larger picture, this wave c might be the end of a larger wave B of a flat formation(see the chart bellow), so the termination of wave c will be also the termination of the larger wave B. Bellow I have shown you what will happen if wave c(B) terminates bellow 1.06. In this case scenario we will get an irregular flat with wave C that has a minimum target of 1.09(this target depends on where wave B terminates) area. In any case in order for this whole scenario to be valid, we need AUDUSD to go bellow 1.0680. If we do not go bellow that level, it means that the triangle scenario posted last week is the correct scenario and we will go straight to 1.0920 area before reversing. It doesn't really matter which scenario will play out, the important thing to remember is that if we continue higher from here, we will be looking to start building short position towards the second half of the week, and if we go lower from here, we will be looking to start building  long position towards the second half of the week.
Good Luck:)

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