AUD/USD – 0.8043
Although aussie did resume recent upmove as the pair broke above previous resistance at 0.8066 (our long position entered at 0.7920 met target at 0.8120), the subsequent retreat from 0.8126 suggests consolidation would be seen and pullback to 0.7995-00 and possibly 0.7963 cannot be ruled out, however, reckon downside would be limited to 0.7921 and brig another rise later. Only a daily close below support at 0.7867-71 would signal a temporary top has been formed, bring retracement of recent rise towards support at 0.7808 which is likely to hold on first testing.
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 upside, expect recovery to be limited to 0.8100 and said resistance at 0.8126 should hold, bring retreat later. A break of 0.8126 would signal recent erratic rise is still in progress and may extend further gain to previous resistance at 0.8163, then 0.8200, however, loss of upward momentum should prevent sharp move beyond 0.8260-65 (61.8% projection of 0.7329-0.8066 measuring from 0.7808), risk from there is seen for a retreat later.
Recommendation: Long entered at 0.7920 met target at 0.8120 with 200 points profit and would stand aside for this week.
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.