AUDUSD made a sharp fall overnight, which we now see as a trigger and an indication for a wave three in progress. As such we can say, that a Running flat correction was completed in the previous wave 2, at the 0.7558 level. A running flat correction is like a normal flat, the only difference is that wave C) of a running flat terminates a little below the area of wave A), as in our case. That said, we now expect the pair to move even lower in the sessions ahead, and ideally unfold a five-wave movement within the current bigger wave three. First support for the minor wave 1) may be seen around the Fibonacci ratio of 61.8.
AUDUSD, 4H
A Running flat:
- structure is 3-3-5
- wave B terminates well beyond the beginning of wave A as in an expanded flat
- wave C fails to travel its full distance, completes the above wave A termination point (in bull market)
- appears in wave two or four in an impulse, wave B in an A-B-C, wave X in a double or triple zig-zag, or wave Y in a triple three
