Commentary - If you have been following the crosses, then you know that we are looking for a significant bottom and strong rally to much higher levels. The weekly chart analysis touches on this and can be found here AUDCAD. We wrote last week that “the rally from .8271-.8751 can be counted as 5 waves up and a 3 wave correction has followed, indicating that the larger degree trend is bullish. The only question is whether or not the drop from .8752-.8588 is a complete correction or just the first leg of a more complex correction.” It is clear now that the drop was the first leg of a more complex correction. Look for a drop below .8572 and for a test of the 50%-61.8% of .8271-.8751 at .8511/.8454 and an opportunity to get bullish if not already so.
Strategy - Longer term bullish against .8119, target much higher (above .9514)
Commentary - The AUDJPY remains in the correction that began at 85.98 on 8/17. As mentioned last week, “everything that has occurred since the low (85.98) is large wave B.” Wave a of B ended at 97.01. Wave b of B is underway now and will either be a flat or a triangle. Both point lower near term but a triangle will be choppy and extremely difficult to trade. A flat would come under 91.73 for a test of the 61.8% of 85.98-97.01 at 90.19 before wave c of B turns up.
Strategy - Flat
Commentary - We wrote last week that “price will continue higher and register a new high in a 5th wave (above 1.1762). This would make 5 waves up from 1.0906 and give way to a larger correction. The correction will offer an opportunity to get aggressively bullish for wave 3 higher.” The pair broke to new highs and a correction lower should begin soon. We will look for an opportunity to get bullish near the former 4th wave in the 1.1400 area.
Strategy - Flat