Trade Idea: AUD/USD – Hold short entered at 0.7720

AUD/USD – 0.7679

Original strategy:

Sold at 0.7720, Target: 0.7550, Stop: 0.7720

Position: – Short at 0.7720
Target:  – 0.7550
Stop:- 0.7720

New strategy :

Hold short entered at 0.7720, Target: 0.7550, Stop: 0.7720

Position: – Short at 0.7720
Target:  – 0.7550
Stop:- 0.7720

Although fell briefly to 0.7627, lack of follow through selling and the subsequent rebound after holding above support at 0.7625 suggest consolidation would be seen, however, as long as resistance at 0.7730 holds, prospect of another decline remains, below said support at 0.7625-27 would extend recent decline from 0.8125 top to 0.7600, then 0.7550, having said that, loss of downward momentum should prevent sharp fall below there and reckon 0.7500 would hold from here, bring rebound later. 

In view of this, we are holding on to our short position entered at 0.7720. Above said resistance at 0.7730 would defer and risk a stronger rebound but only break of previous support at 0.7770 would abort and suggest a temporary low has possibly been formed, bring rebound to 0.7800 and then towards 0.7825-35 later.

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.