AUD/USD – 0.7850
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 up
New strategy :
Although aussie has continued trading lower after recent anticipated decline and near term downside risk remains for the corrective fall from 0.8066 top to bring retracement of early upmove in wave iv to 0.7839 (previous resistance tuned support) and possibly 0.7800, near term oversold condition should prevent sharp fall below 0.7786 support and price should stay above wave i top at 0.7712, bring rebound later.
In view of this, would not chase this fall here and would be prudent to stand aside for now. On the upside, expect recovery to be limited to 0.7900 and bring another decline later. Above 0.7940-45 would suggest low is possibly formed and bring test of indicated resistance at 0.7980, break there would add credence to this view, bring a stronger rebound to 0.8000, then towards 0.8043 resistance, above there would signal the pullback from 0.8066 top has ended instead, bring retest of this level first. We are keeping our latest bullish count that recent impulsive waves is unfolding as (1 2, (i)(ii), i ii) and may extend headway towards 0.8150.
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.