AUD/USD – 0.7495
Recent wave: Wave 5 ended at 1.1081 and major correction has commenced for fall to 0.7000 and then towards 0.6500-10
Trend: Near term down
Original strategy :
Buy at 0.7390, Target: 0.7540, Stop: 0.7330
New strategy :
Buy at 0.7420, Target: 0.7570, Stop: 0.7360
As aussie has risen again after brief pullback, adding credence to our view that low has been formed at 0.7329, hence consolidation with upside bias remains for further gain to resistance at 0.7556 but break there is needed to provide confirmation, bring subsequent rise towards 0.7595-00 which is likely to hold from here due to near term overbought condition.
In view of this, we are looking to buy aussie on dips but at a higher level as 0.7400-10 should limit downside and bring another rise. A break of support at 0.7388 would abort and signal top is formed, bring further fall to 0.7360 but said recent low at 0.7329 should remain intact. Only a drop below this support at 0.7329 would abort and signal recent decline has resumed and extend weakness to 0.7295-00 (76.4% retracement of 0.7158-0.7750).
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.