Trade Idea: AUD/USD – Buy at 0.7300

AUD/USD – 0.7354

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 :

Sell at 0.7470, Target: 0.7300, Stop: 0.7530

Position: –
Target:  –
Stop: –

New strategy :

Buy at 0.7300, Target: 0.7500, Stop: 0.7240

Position: –
Target:  –
Stop:-

Although aussie has fallen again after brief recovery and near term downside risk remains for recent decline to extend further weakness to 0.7320, loss of downward momentum should prevent sharp fall below 0.7295-00 (76.4% retracement of 0.7158-0.7750) and bring rebound later, above 0.7425-30 would bring rebound to 0.7490-00 but break of 0.7510 is needed to signal low is formed, bring test of subsequent rise towards resistance at 0.7556 which is likely to hold from here. 

In view of this, we are inclined to turn long on next decline. Below 0.7245-50 would risk weakness to 0.7200-10, however, reckon previous support 0.7158 would contain downside and aussie may stage another strong rebound from there later this week. 

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.