Trade Idea: AUD/USD – Buy at 0.7605

AUD/USD – 0.7688

Original strategy:

Exit short entered at 0.7620

Position: – Short at 0.7620
Target:  –
Stop:-

New strategy :

Buy at 0.7605, Target: 0.7805, Stop: 0.7545

Position: –
Target:  –
Stop:-

As aussie has rallied after staged a strong rebound from 0.7501, adding credence to our view that a temporary low has been formed there and the breach of resistance at 0.7654 signals recent selloff has ended, hence consolidation with upside bias is seen for at least a retracement of recent decline to 0.7700, then towards resistance at 0.7730, above there would encourage for subsequent headway to 0.7800-05 which is likely to hold from here due to near term overbought condition. 

In view of this, would not chase this rise here and we are looking to buy aussie on pullback as 0.7600-05 should limit downside and bring another rally. Below previous resistance at 0.7580 would defer and risk weakness to 0.7550-55 but price should stay well above said support at 0.7501, bring another strong rebound later this month.

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.