Recent wave: Wave 4 ended at 0.8066 and wave 5 has possibly ended at 1.1081
Trend: Near term down
Original strategy :
Buy at 0.9145, Target: 0.9340, Stop: 0.9085
New strategy :
Buy at 0.9145, Target: 0.9340, Stop: 0.9085
Yesterday's rally to 0.9251 adds credence to our view that a temporary low is possibly formed at 0.8999 last week (as wave v) and consolidation with upside bas remains for test of resistance at 0.9306 (last week's high), however, a break above there is needed to confirm this view and bring correction of recent decline to 0.9345-50 and later towards 0.9390-00, otherwise, further choppy trading is in store.
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 with 1: 0.9223, 2: 0.8770, 3: 1.0183, iv: 0.9536 and wave v of 3 has ended at 1.1081 (it could also be the top of entire wave 5). In view of recent acceleration of decline, a sustained breach below support at 0.9672 would confirm wave 5 has ended at 1.1081 and bring major correction of medium term uptrend to 0.9000 and then 0.8900.
In view of this, we are looking to buy aussie on dips. Below 0.9090 would risk test of minor support at 0.9036 but break there is needed to signal recent decline has once again resumed and bring retest of 0.8999, then towards 0.8970, however, as this move is still viewed as the wave v of recent decline, reckon downside would be limited to 0.8950 and price should stay above 0.8900-10, risk from there remains for a correction of recent decline to take place later this week.
On the bigger picture, the major rise from 0.6007 is wave (B) and only wave iii of wave C has ended at 0.9407, followed by wave 4 at 0.8066 and wave 5 has either ended at 1.1081 or may extend to 1.1195/00 but reckon 1.1300 would hold.
IMOH, Clement I.
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