The AUDCHF recent rally is countertrend and should give way to new lows in the coming weeks. The AUDCAD and AUDNZD are poised to rally significantly in the coming weeks and months.
As we have stated over the weeks and months, 1.0823 (11/1/07) is probably a multi-year high for ‘risk’ (which is what the AUDCHF represents). A series of 1st and 2nd waves has unfolded since. Near term, look for a rally to end near .9722-.9820 (50% and 61.8% of 1.0135-.9312) before the decline accelerates. Price should remain below the line that connects the 11/1/07 and 2/26 highs.
The AUDCAD 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. A measured objective is where the rally from .8271 would equal the rally from .8119 to .9514; at .9670. We wrote last week that “near term weakness has presented an opportunity to get bullish against .8783.” Risk can be moved to .9086.
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. Near term, the rally from 1.1271 is viewed as wave i of 3 (within the 5 wave advance from 1.1149). Look for support (and buying opportunities) near 1.1450 (61.8% of 1.1271-1.1743). The 200 day SMA reinforces this area.
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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: EURJPY, GBPJPY, CHFJPY, CADJPY, AUDJPY, NZDJPY
Tuesday: EURGBP, EURCHF, EURCAD, EURAUD, EURNZD
Wednesday: GBPCHF, GBPCAD, GBPAUD, GBPNZD
Thursday: AUDCHF, AUDCAD, AUDNZD
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