AUD USD made its last top at 1.1080 in the end of July 2011. These figures have remained untouched for more than three years, since the rate has declined by more than 25 cents to as low as 0.8540. However, no trend lasts forever, so we might want to examine the wave structure of AUD USD, in order to see whether we should expect more significant sell-offs.
The rule states that if it is not an impulse, it must be a correction. The price action on the weekly chart of AUD USD is definitely not impulsive. Instead, it appears to be taking the form of a double zig-zag correction, labeled W-X-Y, where wave X is a triangle. Triangles precede the final movement of the larger sequence, which in our case is wave Y. Furthermore, you can also see how price is contained within a channel. If this is the correct count, the decline could be close to completion.
