AUD/USD – 0.7562
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 up
New strategy :
Sell at 0.7595, Target: 0.7400, Stop: 0.7655
As aussie has fallen again after breaking support at 0.755, adding credence to our bearish view that the decline from 0.7750 top (last month’s high) is still in progress and may extend further weakness to 0.7530 but a break below indicated support at 0.7491 is needed to retain bearishness and bring further subsequent decline to 0.7450-55 (50% Fibonacci retracement of 0.7158-0.7750), however, near term oversold condition should limit downside to 0.7380-85 (61.8% Fibonacci retracement), risk from there is seen for a rebound later.
In view of this, would not chase this fall here and would be prudent to sell aussie on recovery as 0.7590-00 should limit upside and bring another decline later. Above 0.7625-30 would defer and risk a stronger rebound to 0.7650 but still reckon resistance at 0.7680-85 would limit upside and bring another decline later.
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.