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 months until the opportunity presents itself for a break.
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 decline from 101.09 is likely wave 5 within the 5 wave bear cycle from 107.84. The 5th wave is likely to extend much lower given the presence of a series of 1st and 2nd waves (within wave 5 itself). A near term bearish objective is at 93.13 (161.8% extension of 101.09-96.92/99.89). 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.
Strategy – Flat
Commentary – We wrote last week that “price will eventually come under 1.1592 prior to the next bullish leg. The former 4th wave in the 1.1400/1500 area is a potential ending point for the decline (and therefore the entire correction as well).” 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.
Strategy – Flat