Trade Idea: AUD/USD - Buy at 0.7890

AUD/USD - 0.7942

Most recent candlesticks pattern : Hammer
Trend : Up
Tenkan-Sen level : 0.8024
Kijun-Sen level : 0.8047
Ichimoku cloud top : 0.7968
Ichimoku cloud bottom : 0.7954

New trading strategy : Buy at 0.7890, Target: 0.8000, Stop: 0.7840

Although aussie dropped sharply on active cross selling versus Japanese yen on risk aversion and fall towards 0.7896 (1.618 times projection of the fall from 0.8156 to 0.8024 measuring from 0.8109), however, as this move is still treated as correction of the rise from 0.7777, further sharp fall is unlikely and the Australian dollar is due for a rebound later today or tomorrow.

Therefore, we prefer to buy aussie on such a decline for a rebound back towards 0.8024 resistance (previous support turned resistance and this level is also the current level of the Tenkan-Sen). However, above the Kijun-Sen (currently locating at 0.8047) is needed to confirm a low has been formed, then stronger rise towards the resistance at 0.8109. Looking ahead, only break of this resistance would signal the pullback from 0.8156 has ended, then the upmove from 0.7777 would resume later.

If aussie drops below 0.7850, this would indicate upmove is not ready to resume just yet and further choppy consolidation would take place and fall to 0.7800 cannot be ruled out.