Trade Idea: AUD/USD – Hold short entered at 0.7875

AUD/USD – 0.7721

Original strategy:

Sold at 0.7875, Target: 0.7700, Stop: 0.7860

Position: – Short at 0.7875
Target:  – 0.7700
Stop:- 0.7860

New strategy :

Hold short entered at 0.7875, Target: 0.7700, Stop: 0.7800

Position: – Short at 0.7875
Target:  – 0.7700
Stop:- 0.7800

Aussie has dropped today and broke below previous support at 0.7733adding credence to our view that the decline from 0.8125 top has resumed, hence bearishness remains for this move to extend weakness to 0.7700 and later towards 0.7660-65, however, near term oversold condition should limit downside and reckon 0.7600 would hold from here. 

In view of this, we are holding on to our short position entered at 0.7875. Above 0.7795-00 would defer and risk a stronger rebound to 0.7820-25 but Only break of latter level would defer and suggest a temporary low is formed instead, risk rebound to 0.7855-60 first, however, price should falter well below resistance at 0.7897. 

On the 4-hour chart, recent upmove from 0.7329 is unfolding as an impulsive rise with wave 3 as well as smaller degree wave (iii) extending, only minor wave v of (iii) has ended at 0.8125, hence bullishness remains for this move to extend headway to 0.8200, then towards 0.8300, however, reckon upside would be limited to 0.8400 and the final wave 5 should falter below 0.8500, bring correction later.