(Click at the pictures to enlarge)We are currently back testing the former supportline of the 2001 to 2008 rise, this former supportline has now become strong resistance and is currently sitting at 86.94. At the same time we have a clear five wave rise from March to the present day at the same time we see a clear negative divergence bulding up, all factors point to a top nearby. You migth gain at best one or two percent, but the risk to the downside after a near 37 percent rise, is much greater.
The name of this game is RISK MANAGEMENT!
So at the very least a protective stop-loss has to be in place at this point. A strategic stop-loss should be placed just below 82.37, which marks the beginning of wave v of 5. A more aggresive stop-loss could be placed just under 84.74. Personly I would prefer to be short AUD ag. USD at this point with a 88.25 stop-loss or I would use one of the two S/L points above to reverse my long position in AUD to short AUD if triggered.
A break below 84.74 and more importantly 82.37 will trigger a move down to 77.00, which marks the ending point of wave 4, but if my count is correct red wave [C] will take us all the way back to and below red wave [A] at 60.04.
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