The current bearish structure on AUDUSD suggests that the cycle-degree correction might not have ended just yet. Wave c, which marks the end of the primary wave ⑤ as well, could slide further down for a fresh low below the 63c. round support (either for a false break or for an extended 5th wave).
When keeping the sharp drop in mind, a range can be expected.
Adding to that the rule of alternation (particularly for multiple degree impulse waves), the decline into intermediate wave (5) then could reinitiate following the breakout of a triangular formation.
Perhaps, this could come in as a standard or a complex zigzag too, as all we need is a longer sideways market when compared to minor wave 2.
Judging by the structure, however, it is possible than the latest decline is part of a zigzag correction. This intermediate degree alternative, of course, suggests that we’ve marked a multiyear support at the pin bar low and prices are now reversing up.
With primary wave ① completed, the current formation indicates than we’re likely to see a bounce at some level near the 63,43c. level. This is the 90% Fibonacci retracement and could be the last sign bulls can expect.
Should we see a bounce anywhere above the previous low (but not at the previous low), then this will likely shoot higher to fresh multiweek highs. The primary wave ③ will cross above ①, unless if a more complex corrective structure invalidates both scenarios analyzed here.
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