Commentary - We wrote last week that “the decline from .9519 is a large correction and is unfolding as a zigzag. Wave A is from .9519 to .9020 and wave B is from .9020 to .9290. Wave C would equal wave A at .8789. The 61.8% fibo of .8123-.9518 is at .8656 and is potential support.” Today?s low is at .8749, very close to the measured objective of .8789. That may be the low but a rally through the wave A low at .9020 would confirm our suspicion. That said, the rally from .8749 is inspiring and a rally through the 5/29 high at .8893 would put an end to the series of lower highs. A decline below .8749 negates the bullish setup and exposes the 61.8% of .8123-.9518 at .8656.
Strategy - Bullish on a rally through .8893, against .8749, targeting above .9520 (potentially much higher levels)
Commentary - The AUDJPY broke below the short term support line that we wrote about last week, so there is bearish potential. However, the decline from the 5/15 high at 100.42 is a 3 wave flat (corrective) and price continues to be supported by the 21 day SMA. Looking at the separate legs of the cross; the AUDUSD looks bullish following the break above a short term resistance line today and the USDJPY is consolidating in what may be a triangle before a thrust to a new high takes place. Back to AUDJPY - as long as 98.90 holds, the trend is bullish. Connecting a line parallel to the one drawn off of the March 2006 and March 2007 lows from the December 2005 high projects and end to the AUDJPY bull trend near 101.45 this week (101.56 next week).
Strategy - Looking for a new high (above 100.42) to tag the mentioned channel line before a reversal.
Commentary - The AUDNZD remains rangebound within a triangle that has persisted for most of the year. Given that the preceding trend was down, probability favors a bearish break from the triangle. Potential support on a break is at the 78.6% of 1.0430-1.2493 at 1.0874 (just above the 2/10/2006 low of 1.0834). 1.1387 must hold in order for the triangle to remain intact.
Strategy - Short term bearish against 1.1387 targeting 1.1000 and 1.0900.