Trade Idea: AUD/USD – Buy at 0.8860
By actionfx
Trade Idea: AUD/USD – 0.8988
Recent wave: Wave v of wave (v) possibly ended at 0.9407
Trend: Sideways
Original strategy : Buy at 0.8835, Target: 0.8990, Stop: 0.8760
New strategy :
Buy at 0.8860, Target: 0.9000, Stop: 0.8795
Although aussie has risen again after yesterday’s retreat, loss of near term upward momentum should prevent sharp rise beyond 0.9055 (previous support, wave i trough) today and risk has increased for a retreat later. Below intra-day minor support at 0.8939 would bring retreat to 0.8860/70 before prospect of another rally probably next week.
Our preferred count is that wave (v) from 0.7700 is sub-divided by wave i: 0.7918, ii: 0.7859, wave iii at 0.8479 (instead of 0.8339) and wave iv correction ended at 0.8241 and wave v (with wave (4) of v ended at 0.8568) has ended at 0.9407. The decline from 0.9407 to 0.8735, tentatively wave A, has ended as a double three as labeled in the chart and wave B is now unfolding. Above 0.9055 would extend the wave B from 0.8735 towards 0.9150 (61.8% Fibonacci retracement of 0.9407 to 0.8735).
In view of this, we would prefer not to chase this rise at current level and look to buy on subsequent pullback. Below 0.8800 would signal rebound from 0.8735 has ended, then retest of this level cannot be ruled out.
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 (v) 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 current bullish count on aussie, 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.
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