Australian Dollar Crosses: AUDCAD Rally Likely to Accelerate

AUDCAD
AUDJPY
AUDNZD


Commentary - We wrote last week that “the AUDCAD correction from .9515 looks complete as does the smaller correction from .8751. Near term, a bullish bias is warranted against .8510 (longer term?against .8271) and the bullish objectives are not until .9681 and 1.0531 (100% and 161.8% ext. of .8119-.9514/.8271). This rally is expected to play out for the next 8 months/year.” No change is needed as the AUDCAD is breaking higher in wave 3 of 3. Short term traders can move risk to .8639 and longer term traders to .8510.
Strategy - Longer term bullish against .8510 (risk moved from .8219), targets .9681 and 1.0531


Commentary - We wrote last week that “the AUDJPY is testing the 61.8% at 99.41 but the pattern does not look close to complete so continue to favor the upside.” The pair has continued to rally and now sits above 100. The next level of measured resistance is not until the 100% ext. of 85.98-97.01/91.73 at 102.75. A rally to there would either complete an A-B-C correction from 85.98 a 3rd of a 3rd advance from 91.73. Either way, expect at least some consolidation near there and possibly an outright reversal.
Strategy - Remain bullish, move risk to 98.40 (from 94.98), target 102.70


Commentary - We wrote a few weeks ago that “a deep pullback to the 61.8% of 1.0906-1.2030 seems reasonable given that this pullback is a larger second wave. Also, the 1.1331 is the former 4th wave and 8/17 reaction low. Expect this corrective decline to take at least a few weeks.” The correction has been in progress since 9/7 and may be complete since the decline from the top is in 3 waves. However, given the time relationship between the impulse and the correction and given that the 5th wave is extended, we favor a deeper correction to 1.1331 before proclaiming wave 2 complete. A cautious bullish stance is warranted against 1.1592.
Strategy - Get bullish close to 1.1340, against 1.0906, targeting above 1.2030 (much higher).