This is an update to the post from yesterday i.e.
Emerging Butterfly Pattern – AUDUSD – H4 Timeframe
Having looked at the pair again, I am a more cautious about the upside.
Click here for updated reference charts …
– We might have a completed wave 5 (v) – 127.2% FibProj of Wave 3 (iii). If that’s the case, then we probably have a top in place at 1.02554, with a 3 wave corrective pattern unfolding. These retracements could go all the way up to 50% of the full 5 wave sequence.
Note: Wave 5 can also be an extended wave, going up to 161.8% of wave 3. We would need a break above 1.02554 for further extension of wave 5.
– The weekly chart is showing bearish divergence, which also signals a potential reversal.
I would like to see a clean break above point X (1.0200) for going long. SL would be below 1.0200, with a first target of 1.02554 – 1.02660. I’m going to see how this scenario develops next week. As of now, I would be on the sideline with this pair.