Yearly Report on FX Market AUDUSD

Elliott Wave Theory

The Elliot Wave Theory represents a development of the well-known Dow theory. It applies to any freely traded assets, liabilities, or goods (shares, obligations, oil, gold, etc.). The Wave Theory was proposed by accountant and business expert Ralph Nelson Elliott in his study titled "The Wave Principle" published in 1938.

After he had retired and a serious illness had been discovered in his organism, Elliott started to observe stock markets and their charts in the hope of understanding the market behavior. After he had performed a large work, he concluded that the market, being a product of predominant psychology of the masses, followed some laws.

The Elliott Wave Theory is based on a certain cyclic laws in human behavior psychology. According to Elliott, the market price behavior can be clearly estimated and shown in the chart as waves (wave is here an explicit price move). The Elliott Wave Theory says that the market can be in two large phases: Bull Market and Bear Market.

Elliott proposes, as well, that all price moves on the market are divided into:

                In the above chart there was a pattern formation of Symmetrical triangle and after the breakdown of the same the wave pattern has been started. After the crossover of support trend line at 0.9855 there was a sharp correction which can be named as wave I, there after slight pull back was seen in form of profit booking which was 50% retracement of the fall and       again reentered in the down side move. Over here the wave I bottom is taking as a support level and if this support is broken will move in form of wave III where the expected target will be 0.8160 where 1.8000 – 1.8100 will be support range and before the crossover below the same range slight bounce will be seen in form of wave IV, wave IV is not expected to cross the higher level of 0.8850 which is the bottom of wave I and is expected to reverse from the level of 0.8600 around. For the year 2014 AUDUSD is expected to be in the down side move where lower level of 0.7500 is the expected target

Wave	Classical Relations between Waves
1	-
2	0.382, 0.5, or 0.618 of Wave 1 length
3	1.618, 0.618, or 2.618 of Wave 1 length
4	0.382 or 0.5 of Wave 1 length
5	0.382, 0.5, or 0,618 of Wave 1 length
A	1, 0.618 or 0.5 of Wave 5 length
B	0.382 or 0.5 of Wave A length
C	1.618, 0.618, or 0.5 of Wave A length