Trade Idea: AUD/USD - Sell At 0.8795
AUD/USD – 0.8700
Recent wave: Wave v of wave (v) has resumed towards 0.8690
Trend: Up
Original strategy
Sell at 0.8795, Target: 0.8600, Stop: 0.8865
Our trading strategy
Sell at 0.8795, Target: 0.8600, Stop: 0.8865
Although aussie has retreated after rising to 0.8776 yesterday, as long as 0.8600 holds, one more rise towards 0.8800 cannot be ruled out, however, loss of upward momentum should limit upside to 0.8813 (61.8% projection) and bring correction later.
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 should extend to 0.8800 before correction.
In view of this, we are inclined to ride this wave v and venture short at 0.8795. On the downside, only below 0.8544 support would signal a temporary top is possibly formed and bring correction to 0.8471/79 (previous resistance turned support) and bring further fall towards 0.8400.
On the bigger picture, the break of 0.8265 and the subsequent rally 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 0.8479 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 0.8800 and 0.8923 (61.8% projection of wave (i) to (iii) measuring from (iv) of wave 3 from 0.8286) should remain intact.
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 0.8923.
