Trade Idea: AUD/USD - Hold short entered at 0.7665

AUD/USD – 0.7672

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: Sideways

Original strategy :

Sold at 0.7665, Target: 0.7465, Stop: 0.7725

Position: – Short at 0.7665
Target:  – 0.7465
Stop: – 0.7725

New strategy :

Hold short entered at 0.7665, Target: 0.7465, Stop: 0.7725

Position: – Short at 0.7665
Target:  – 0.7465
Stop:- 0.7725

Although aussie has traded with a relatively firm undertone after staging a strong rebound from 0.7558 (last week’s low), if our view that top has been formed at 0.7735 is correct, upside should be limited to 0.7690-00 and bring another retreat, below 0.7610-15 would signal the rebound from 0.7558 has ended, bring another test of this level, break there would add credence to this view, bring further fall to previous support at 0.7506 and later towards another support at 0.7442.

In view of this, we are holding on to our short position entered at 0.7665. Above 0.7709 resistance would risk retest of indicated resistance at 0.7735 but break there is needed to signal recent erratic rise has resumed for headway to previous chart level at 0.7758, once this resistance is penetrated, this would signal an upside break of early established broad range has occurred, bring subsequent rally to 0.7800-10.

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.

Trade Idea: AUD/USD - Hold short entered at 0.7665