AUDCAD
AUDJPY
AUDNZD
Commentary – For months, we have been focusing on the long term 5 wave rally from .8165-.9514 which was followed by a 3 wave decline to .8375. However, since the decline into .8375, price action has been very choppy and the pattern is unclear. It appears that there are two 3 wave movements (one up and one down). This is suggestive of a triangle. Under this scenario, the AUDCAD would remain in a range for a number of weeks until the opportunity presents itself for a break. Short term, there is the opportunity to play the range as the AUDCAD is at the top of the recent range.
Strategy – Wait for range to play out (or trade it if you like that sort of thing) before playing a break
Commentary – Last week, we wrote that “the best opportunity in this pair will come on the larger wave 2 (or B) setback that could bring price back to the 101.00 area. This would offer the opportunity to get bearish for wave 3 (or C ) lower. This is likely to take a few weeks to set up though. There is no change in the outlook as this is exactly what is happening. Wave v (and larger 1) ended at 92.99 and larger wave 2 is on its way to resistance near 101.09 (11/14 high). This level is very close to the 50% and 61.8% of 107.81-92.99 at 100.41/102.16.” Near term, waves a and b of larger 2 may be complete and therefore wave c is underway towards the mentioned objectives. Wave c would equal wave a at 100.91 (between the 50% and 61.8% Fibos of 100.41 and 102.16).
Strategy – Bullish against 95.25, target 100.41
Commentary – We wrote last week that “the AUDNZD has come into this area so we are looking for a bottom to form soon. The next rally is expected to carry price through 1.2091. 1.1337 is the next level of potential support.” The pair has come into the 61.8% of the 1.0905-1.2033 rally and larger wave 2 (flat correction) from 1.2033 is close to complete. Now is the time to position for the expected rally through 1.2000.
Strategy – Bullish, against 1.0905, target much higher