Trade Idea: AUD/USD — Buy At 0.9000

AUD/USD – 0.9082

Recent wave: Wave v of wave (v) possibly ended at 0.9407

Trend: Sideways

Original strategy

Buy at 0.9035, Target: 0.9200, Stop: 0.8970

New strategy

Buy at 0.9000, Target: 0.9200, Stop: 0.8935

As aussie retreated after faltering below yesterday's high at 0.9134, suggesting further consolidation would take place and whilst pullback to 0.9000/05 (approx. 38.2% Fibonacci retracement o 0.8800 to 0.9134) cannot be ruled out, reckon 0.8967 (50% Fibonacci retracement) would hold and bring another rally later. Above said resistance would extend gain to 0.9175 (previous support turned resistance), break there would encourage for further rise to 0.9200.

Our preferred count is that the major rise from 0.6007 a wave (B) and the wave C of this 3-legged (B) commenced from 0.6248 which ended at 0.9407. then the fall from 0.9407 to 0.8735 is wave A and the rise from 0.8735 to 0.9331 is re-labeled as a-b-c wave B (as marked in the attached chart). Therefore, the decline from 0.9331 is the wave C with minor wave i ended at 0.9175 and wave ii at 0.9280, wave iii has ended at 0.8781, wave iv ended at 0.8916 with wave v at 0.8578, a breach of 0.9175 (wave i tough) would confirm this view and then headway towards 0.9331 would be seen later.

In view of this, we are still looking to buy aussie on pullback for such rise. Only below support at 0.8928 (61.8% Fibonacci retracement of 0.8800 to 0.9134) would defer and risk correction to 0.8880 but support at 0.8800 should continue to hold.

On the bigger picture, aussie's rally after breaking resistance at 0.8265 confirms our bullish count that wave C rally from 0.6248 (2 Feb 2009) has resumed and the wave 5 of this wave C has either ended at 0.9407 or may extend marginally, however, as this move is the last leg of the larger degree wave 3 of C, upside should be limited to 0.9600.To re-cap the rally from 0.6007 to 0.7270 (7 Jan 2009) is tentatively marked as wave A, the retreat to 0.6248 (2 Feb 2009) is seen as wave B and the subsequent upmove is labeled as wave C should extend be capped below 0.9600.

Based on ActionForex.com Technical Outlook

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