EURAUD a clear wave pattern

Posted above is a long term chart of the EUR/AUD the pattern that took place since 1999 is that of an expanded flat correction correcting a move dating back to the 70's. Points to note is that the pattern roughly ended and the 1.618x wave A (circle) which is a typical target for wave C of an expanded flat. Also notice that the move lasted 13 years which is a fibonacci number. Looking at the C wave in greater detail we can see that the the 5th intermediate wave was 0.382x the distance traveled from wave (1) through (3). Supposing that this pattern was not an expanded flat we can still expect a significant correction from the move that started in 2009 which lasted 3 fibonacci years. This chart is full of fibonacci time clusters which leads me to believe that the low seen this year is indeed a low of cycle degree and a significant move to the upside can be expected. Another point to notice is the strong divergence between wave (3) and (5) as highlighted on the chart above. also if you look closely into the chart you will notice that rallies of significance in this chart was accompanied by declines in risk sentiment. This currency pair rallied in 2000 as the nasdaq crashed, and rallied as well during the financial crises. All this evidence suggests that we are entering a long waited for risk off mode. Another technical aspect to notice is the potential inverse head and shoulders that is forming as we speak.

 looking at the 2012 rally it very much seems impulsive followed by a text book 5-3-5 zigzag which took us into the 38.2% retracement of the 2012 rally, we also made it back into the wave 4 vicinity of one lesser degree all of which suggest that a continuation of the uptrend shall occur from current levels the alternate count is that the decline is only wave A/W of a more complex correction however R.N. Elliott says that the simplest pattern is typically the right interpretation. A breach of the corrective price channel ( which contained the entire move typical of corrective patterns) on the upside would be the first confirmation of a move to the upside. This currency pair seems the clearest out of all, looking at my analysis on the EUR/USD the eur is expected to decline against the USD which suggests that the AUD/USD (which is not clear from a wave perspective) Shall fall harder and be of the biggest losers typical of a risk off enviroment. However I dont like to trade currencies in which I dont see patterns I recognize hence I would much rather look for clues on this pair for a move to the upside.

Regards,
Ahmed Farghaly

Also view: http://competent-trades.blogspot.com/2012/04/point-to-note-on-gold-and-audusd.html