Australian / Canadian Dollar Cross to Correct Before Next Bull Leg


We maintain our stance that a multi-year top is in place at 1.0823. The down-up sequence from 1.0823 to .9508 to 1.0135 is waves 1 and 2. The top of wave 2 at 1.0135 is the bearish line in the sand but resistance should be strong near .9657 (61.8% of 1.0135-.8879).


We have been bullish on the AUDCAD for months and we still are longer term bullish but expect a sizeable countertrend decline to play out over the next few weeks / month. “The rally from .8119 to .9514 was in 5 waves and the decline to .8271 was clearly a 3 wave correction. Therefore, .9514 is expected to give way to a new high eventually.” The rally from .8271 could be a leading diagonal as wave 1 of the next 5 wave advance. If this count is correct, then the AUDCAD will decline into the Fibo reversal zone, which is .8718/.8992 (38.2% to 61.8% of .8271-.9440). The 200 day SMA rests in this zone near .8900 currently. In summary, expect the AUDCAD to decline for the next few weeks before the longer term advance resumes.


With 5 waves up from 1.0906 to 1.2031 and with 3 waves down from 1.2031, the AUDNZD is expected to eventually exceed 1.2031. The rally 1.1150 is viewed as a series of 1st and 2nd waves. Price needs to remain above 1.1334 in order for us to remain bullish near term. The break through the 200 day SMA inspires confidence in the bullish bias.

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[B] [B]TREND ANALYSIS[/B] is based on a rolling pivot model. LONG TERM TREND is determined by the last 3 months of price data (high, low, close). SHORT TERM TREND is determined by the last 4 weeks of price data (high, low, close). R3, R2, R1, PL, PH, S1, S2, and S3 are provided to aid in identifying entries and exits. These are objective measures and our subjective analysis (STRATEGY) may differ.

[B]SCHEDULE[/B]
Monday: EURGBP, EURCHF, EURCAD, EURAUD, EURNZD
Tuesday: EURJPY, GBPJPY, CHFJPY, CADJPY, AUDJPY, NZDJPY
Wednesday: GBPCHF, GBPCAD, GBPAUD, GBPNZD
Thursday: AUDCHF, AUDCAD, AUDNZD

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