AUDUSD Elliott Wave Analysis – Rising Diagonal Pattern Near Completion
Overview
The AUDUSD pair has formed a clear ending diagonal pattern, signaling potential exhaustion of the current bullish trend. This structure, often seen at the final stage of an impulse wave, suggests that a corrective phase may soon follow. The diagonal appears complete with all five internal waves labeled (I-V), indicating that the market might be preparing for a deeper pullback.
Technical Analysis
According to the Elliott Wave structure visible on the 6-hour chart, AUDUSD completed its fifth and final wave near the 0.67 region. The wedge pattern is now narrowing, with bearish divergence hinting at weakening bullish momentum.
Wave Structure:
Wave I started the diagonal formation, initiating the rising trend.
Waves II and IV acted as corrections, forming higher lows.
Wave V extended slightly but failed to make a strong breakout, suggesting exhaustion.
The price currently trades near 0.6560, with a potential retracement zone between 0.6450 and 0.6500. This range coincides with a strong demand zone and the lower boundary of the diagonal pattern. A pullback into this area could complete the corrective (A)-(B)-(C) structure before the next major directional move.
Key Levels
Support Zone: 0.6450 – 0.6500
Immediate Resistance: 0.6650 – 0.6680
Breakout Confirmation: A sustained break below 0.6450 could confirm the end of the diagonal and open the door toward 0.63 in the medium term.
Invalidation: A breakout above 0.67 would invalidate the bearish correction scenario.
Market Outlook
The diagonal’s completion suggests that the pair may enter a short-term correction phase. However, traders should monitor price action near the support area before confirming the next trend direction. If buyers defend the 0.6450 zone, a rebound toward 0.6650 is likely. Conversely, a clear break below the wedge would strengthen bearish momentum.
Given the overall wave count, the market is likely in transition between an impulsive and a corrective phase. Patience is crucial at this stage, as the next few sessions will determine whether the larger uptrend resumes or a deeper retracement unfolds.