Australian Dollar Clear Short Term Bearish Opportunity

[B]“Australian Dollar Clear Short Term Bearish Opportunity”[/B]

  • Euro Decline May Prove Impulsive
  • Japanese Yen Breaking Out
  • British Pound Decline Looks Corrective
  • Swiss Franc Towards Fibo Level
  • Canadian Dollar To 1.0094
  • Australian Dollar Clear Short Term Bearish Opportunity
  • New Zealand Dollar Stalling at Big Congestion Zone

Commentary: A top is in at 1.4281, but the question is what degree top is in place. So far, there is just 3 waves down from the top but if the decline extends to 5 waves lower, then we?ll have an opportunity to get bearish against the high (1.4281). There are a few possibilities from a wave count perspective. A 5 wave rally from 1.3360 may be complete from 1.3360 with an extended 5th wave. Therefore, we are looking for at least a return to 1.3828 (former 4th wave) and possibly 1.3712 (61.8% of 1.3360-1.4281). As the decline unfolds, we will be able to better ascertain bearish targets.

Strategy: Flat (waiting for clarity)

Commentary: “We have continued to state that we expect a return to 118.00 in order to complete wave C of the A-B-C from 111.59 and that this count remains favored unless price drops under 112.59.” This count is now favored as long as price is above 113.99 and preferably 114.67. Near term, the subdivisions are not especially clear but there is no reason to change the outlook for a rally to exceed 117.12 (minimum) before a reversal opportunity presents itself.

Strategy: Remain bullish, move risk to 114.67 from 113.99, target 118.00

Commentary: Longer term, it is still possible that 2.0654 will be exceeded as the decline from there is in 3 waves. Under the bullish, the rally from 1.9651 is wave 1 and the decline from 2.0366 is wave 2. Wave 3 then is underway now and if this is the case, then the rally should accelerate. However, given the possible bearish count in the EURUSD, caution is warranted. The longer term bullish case is valid as long as price is above 2.0084. The other possibility is that a larger complex correction is unfolding from the top (2.0654), such as a triangle or flat.

Strategy: Flat

Commentary: The USDCHF rallied higher as expected but be careful about getting aggressive just yet. The rally from 1.1623 may be just the first leg of a correction in wave iv. Look for resistance in the 38.2% of 1.2151-1.1623 at 1.1825 (also a former congestion area). If the rally from 1.1623 unfolds in 5 waves (just 3 now), then it is likely that at least one more 5 wave advance will unfold and we will try and catch the next rally.
Strategy: Move to flat (from bullish)

Commentary: We wrote last week that “there is no reason to get bearish now though, as we still expect a drop to a new low to be fully retraced since the decline would complete wave 3 within the 5 wave bearish cycle from 1.0866.” The drop below .9936 to .9910 did indeed complete wave v and larger wave 3 from 1.0676. Look for a rally in wave 4 to end near 1.0094 before a drop to yet a new low in wave 5.
Strategy: Flat

Commentary: We are looking at the very short term charts this morning because the decline from .8947 may be in 5 waves and if that is the case, then there is a bearish opportunity. The rally from .8807 could very well be unfolding in 3 waves as either larger wave B or 2. Look for a short term bearish entry near .8894/.8917 (61.8%-78.6% of .8947-.8807).

Strategy: Look for bearish entry near .8894/.8917, against .8947.

Commentary: The rally from .6824 is either the end of a correction (wave C) or wave 3 within a 5 wave bull cycle from .6639. Price has stalled within the former congestion zone (.7531-.7731). A larget setback over the next few weeks to the former 4th wave at .7304 is possible.

Strategy: Flat