AUD/USD – 0.7200
Recent wave: Wave 5 ended at 1.1081 and major correction has commenced for fall to 0.7000 and then towards 0.6500-10
Original strategy :
Sell at 0.7340, Target: 0.7140, Stop: 0.7400
New strategy :
Sell at 0.7300, Target: 0.7100, Stop: 0.7360
As aussie recovered after holding above last week’s low at 0.7158, suggesting further consolidation above this level would be seen and test of resistance at 0.7247 (last week’s high) cannot be ruled out, however, reckon upside would be limited to 0.7295-00 (38.2% Fibonacci retracement of 0.7525-0.7158) and bring another decline. A break of said support at 0.7158 would extend recent decline in wave (C) to 0.7100-10, however, loss of downward momentum should prevent sharp fall below 0.7070 and reckon psychological support at 0.7000 would hold from here, bring rebound later.
In view of this, we are looking to sell aussie on recovery as 0.7295-00 should limit upside, bring another decline. Above 0.7340-45 (50% Fibonacci retracement of 0.7525-0.7158) would defer and risk a stronger rebound to 0.7385 (61.8% Fibonacci retracement) but still reckon price would falter below 0.7430-35 and bring another selloff.
On the 4-hour chart, the move from 0.8066 is the wave 5 with i: 0.8860, ii: 0.8315, wave iii is an extended move ended at 1.0183, iv: 0.9706 and wave v has ended at 1.1081 (also the top of entire wave 5). The subsequent selloff is the major correction which is unfolding as ABC-X-ABC and 2nd A leg has ended at 0.8848, followed by a-b-c wave B which ended at 0.9758, hence, 2nd C wave is now in progress and indicated downside target at 0.7000 and 0.6950 had been met, so further fall to 0.6710-20 cannot be ruled out.