AUD/USD – 0.8973

Recent wave:  Wave 5 ended at 0.9389 as failed 5th and major correction is underway

Trend:  Down

Original strategy : 

Bought at 0.8900, Target: 0.9050, Stop: 0.8830

New strategy  : 

Exit long entered at 0.8900 and

Buy at 0.8860, Target: 0.9050, Stop: 0.8795

Although aussie has risen after anticipated pullback to 0.8896 last Friday (we entered long at 0.8900), weakening of near term upward momentum suggests risk has increased for a minor correction below said Friday’s low may bring retracement to 0.8850/60 before renewed buying interest emerges again.

In view of this, we are exiting our long position entered at 0.8900 (with over 70 points profit) and look to buy the currency pair again on pullback in anticipation of another upmove to 0.9000, then 0.9050, however, reckon 0.9105/10 (100% projection of 0.8066 to 0.8860 measuring from 0.8315) would limit upside.

Our preferred count on the 4-hour chart is that the wave B from 0.8066 is probably unfolding as a complex correction abc-x-abc and first set of abc has ended at 0.8860 and the fall to 0.8315 is x wave and 2nd a leg ended at 0.8871 and 2nd b leg has ended at 0.8633 on Monday, hence 2nd c leg is now in progress for the aforesaid upside targets.

Below 0.8795/00 would suggest temporary top has possibly formed and risk test of minor support at 0.8737, break there would confirm and weakness to 0.8690 and then key support at 0.8633 would follow.

Our latest preferred count in the 4-hour chart is that, the entire fall from 0.9389 to 0.8066 is treated as end of a-b-c A wave and the rebound from there is wave B which is abc-x-abc with first set of abc ended at 0.8860 (a: 0.8552, b: 0.8089 and c at 0.8860), followed by x wave at 0.8315 and this wave B should be limited to 0.9000 and bring C wave decline later.

On the bigger picture, the major rise from 0.6007 is wave (B) and the wave C of this 3-legged (B) commenced from 0.6248 which ended at 0.9389 (with a failed wave 5). Therefore, major wave (C) decline has commenced from there and the A leg is unfolding which is sub-divided into a-b-c which ended at 0.8066 and wave B is unfolding.