Trade Idea: AUD/USD - Buy At 0.9035

AUD/USD – 0.9154

Recent wave: Wave v of wave (v) possibly ended at 0.9407

Trend: Near term up

Original strategy

Buy at 0.9035, Target: 0.9200, Stop: 0.8970

New strategy

Buy at 0.9035, Target: 0.9200, Stop: 0.8970

Although aussie rebounded after yesterday's retreat to 0.9096, as long as resistance at 0.9209 holds, further consolidation would be seen and another corrective fall to said support would be seen, break there would bring correction of recent rise to 0.9053/56 (38.2% Fibonacci retracement of 0.8800 to 0.9209 and last week's low) would be seen, however, renewed buying interest should emerge well above 0.9000 and bring another upmove later. Above said resistance would extend the rise from 0.8567 to 0.9240/50 and then towards 0.9294 (100% projection of wave i) but overbought condition would limit upside to 0.9331.

Our preferred count is that the major rise from 0.6007 a wave (B) and the wave C of this 3-legged (B) commenced from 0.6248 which ended at 0.9407. then the fall from 0.9407 to 0.8735 is wave A and the rise from 0.8735 to 0.9331 is re-labeled as a-b-c wave B (as marked in the attached chart). Therefore, the decline from 0.9331 is the wave C with minor wave i ended at 0.9175 and wave ii at 0.9280, wave iii has ended at 0.8781, wave iv ended at 0.8916 with wave v at 0.8578, early breach of indicated resistance at 0.9175 (wave i tough) adds credence to this view and aussie looks set to head towards 0.9331 later.

In view of this, we are still looking to buy aussie on further pullback for such rise. Only below support at 0.8979 would defer and risk correction to 0.8910/20 but support at 0.8800 should continue to hold.

On the bigger picture, aussie's rally after breaking resistance at 0.8265 confirms our bullish count that wave C rally from 0.6248 (2 Feb 2009) has resumed and the wave 5 of this wave C has either ended at 0.9407 or may extend marginally, however, as this move is the last leg of the larger degree wave 3 of C, upside should be limited to 0.9600.To re-cap the rally from 0.6007 to 0.7270 (7 Jan 2009) is tentatively marked as wave A, the retreat to 0.6248 (2 Feb 2009) is seen as wave B and the subsequent upmove is labeled as wave C should extend be capped below 0.9600.