Australian Dollar Crosses at Risk of Reversing

Divergence with RSI at each pair’s high and nearby Fibonacci resistance suggest that the AUDCHF and AUDCAD are at risk of reversing to the downside.


Australian Dollar / Swiss Franc[/B]

The multi month AUDCHF rally (which is choppy and corrective in nature) is nearing the 61.8% retracement of the entire decline from 1.0091; at .8882. This is a potentially significant level that could see a reversal. Signs such as RSI divergence warn of a reversal as well.

[B]Australian Dollar / Canadian Dollar[/B]

There is no confirmation of a top but be on the lookout for one because warning signs (such as RSI divergence) indicate that the AUDCAD is unsustainable. The pair is testing resistance from a line extended from daily highs in October, January, and April. A push above there exposes the 78.6% retracement of the decline from .9853; which is at .9274.

[B]Australian Dollar / New Zealand Dollar[/B]

The AUDNZD decline that ended just shy of the 61.8% of 1.2009-1.2949 at 1.2360 may have been a small second wave within an ongoing impulse from 1.2009. The larger trend is bullish above 1.2009 and a break through 1.30 is expected. In the event that a complex second wave is underway from 1.2949, the AUDNZD would dip below 1.2380 but just temporarily before the next bull leg.

[I]Jamie Saettele publishes Daily Technicals every weekday morning (930 am EST), COT analysis (published Monday mornings), technical analysis of currency crosses throughout the week (EUR on Tuesday, JPY on Wednesday, GBP on Thursday, AUD on Friday), and the DFX Trend Index every day after the NY close. He is also the author of Sentiment in the Forex Market.

Please send comments about this report to <[email protected]>[/I]