AUDNZD is severely overbought and my proprietary indicators just gave another sell signal in the London session. Yesterday I tried a sell stop strategy as I wanted to see the selling continue into the US session. Instead, a very sharp rally occurred to a new high, eliminating the current sell signal. This morning we have a similar setup today. Only after that sharp rally yesterday, only a minor new high was made before selling pressure entered this market. This pair is trading very heavy and should fall hard soon.
In addition, the Elliott Wave count shows a Flat Correction is occurring with yesterday's rally to a new high being wave (b). The pair is currently in wave (c) down, which is an impulsive move and therefore very strong. I'm looking for a move just below wave a, which is in line with Flat Correction rules, and to around the 23% Fibonacci retracement level around 1.1140. I always add a few pips to be safe, and to adjust for the spread.
Also keep in mind that the Fed is doing their thing today so this can cause this pair to really move later on today which fits well with my analysis calling for a sharp move lower in an impulsive wave (c). Here's my trade setup:
Sell stop at 1.12450
Stop loss at 1.13250
Take profit at 1.1150
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PLEASE NOTE: THIS IS AN ELLIOTT WAVE BLOG EXPRESSING AN OPINION AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. TRADE AT YOUR OWN RISK.