EUR/AUD: Short Setup Forming—Is the Downside Just Beginning?

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EUR/AUD is flashing the early signs of a new short trading opportunity, with the latest chart pointing toward a fresh move lower as the corrective phase may be wrapping up.

What the Current Structure Shows (Primary Scenario)
Corrective Pattern Complete: The strong advance off the May 14th, 2025 lows at 1.7247 unfolded as a classic double zigzag (WXY), culminating at recent highs. Price action has since reversed and formed an initial impulse down—clear evidence that the correction may be over.

Wave 1 Down, Expanded Flat for Wave 2: The chart now displays a completed wave 1 on the downside, followed by an expanded flat for wave 2—where price retraced upward but failed to break the previous peak, a sign of fading bullish momentum.

The recent structure shows a sharp, impulsive move down (wave 1), fitting Elliott Wave expectations for a new trend immediately after a complex correction.

The expanded flat for wave 2—where the B wave exceeded the start of A and C pushed higher—typically heralds a strong, extended wave 3. This supports a bearish outlook from current levels.


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