Australian Dollar Resistance at .8750

[B]Commentary:[/B] We wrote yesterday that "we are treating the decline as the beginning of larger wave 4 in the 5 wave rally from .7268. Over the next seversal weeks, the AUDUSD could decline to the former 4th wave at .8162. However, since we are viewing this as a larger correction, trading is likely to prove choppy over the next several weeks (but chop lower).

It is possible to count 5 waves down with an extended 3rd wave down from .8870 (which is likely wave A of the large correction), thus near term risk is to the upside towards .8545 and .8649." The AUDUSD is testing .8600. A push through .8600 would give scope to a test of the 61.8% of .8870-.8458 at .8713. If a large flat is unfolding, then the AUDUSD will likely test the high at .8870. There will be an opportunity to get short for wave C of this correction, but the pattern is not clear enough to act upon yet. [B]Strategy:[/B] Flat