AUD/USD – 0.7615
AUD/USD – Wave 5 of C and (B) has possibly ended at 1.1081
Although aussie rose to as high as 0.7717 late last week, the subsequent sharp retreat from there suggests a temporary top has been formed and consolidation with initial downside bias is seen for weakness towards support at 0.7535, however, still reckon downside would be limited to 0.7490-00 and bring another rise later, above 0.7680-85 would bring retest of 0.7717, however, loss of upward momentum should prevent sharp move beyond previous chart resistance at 0.7750, bring another retreat later.
We are keeping our count that top has been formed at 1.1081 (wave 5 of V) and major correction (A-B-C-X-A-B-C) has commenced, indicated downside targets at 0.7945 (61.8% Fibonacci retracement of entire rise from 0.6007-1.1081) and 0.7750 had been met and downside bias is seen for further weakness to 0.6800, then 0.6700 but reckon 0.6500 would hold from here.
Our preferred count is that the rally from 0.6007 to 0.7270 (7 Jan 2009) is marked as wave A, the retreat to 0.6248 (2 Feb 2009) is wave B and the subsequent upmove is labeled as wave C with wave (iii) and wave (iv) ended at 0.8265 and 0.7700 respectively and wave (v) as well as 3 ended at 0.9407, then wave 4 ended at 0.8066 (instead of 0.8578). The wave 5 has met our indicated projection target of 1.1060 and could ended at 1.1081, this level is now treated as the peak of wave (C) as well as larger degree wave B, hence major fall in wave C has commenced, our initial downside target at psychological support at 0.7000 has just been met and further weakness to 0.6500 would be seen later.
On the downside, whilst initial pullback to 0.7535 support cannot be ruled out, reckon downside would be limited to 0.7490-00 and bring another upmove later. Below 0.7455-60 would abort and suggest the rebound from 0.7329 has ended instead, bring further fall to 0.7415 support, however, as broad outlook remains consolidative, indicated strong support at 0.7372 should remain intact.
Recommendation: Buy at 0.7500 for 0.7700 with stop below 0.7400.
Our alternate count on the daily chart treated the top formed in 2008 at 0.9851 could be a larger degree wave I and was followed by a deep and sharp correction in wave II to 0.6007 and wave III is unfolding from there.
The long-term uptrend started from 0.4775 (2 Apr 2001) with an impulsive structure. Wave I is labeled as 0.4775 to 0.9851 (15 Jul 2008), wave II has ended at 0.6007 (Oct 2008) and wave III is still in progress which may extend further gain to 1.1265.