Australian Dollar Crosses Reversing From Multi-Year Highs


AUDCAD - As we have maintained since early April, the 5 wave rally from .8122 to .9519 suggests that a 3 wave pullback is the next move. Initial support is at the 2/12 low of .9053. Since the decline from .9519 has itself taken on an impulsive look, it is likely that this is just the first leg of the correction lower (A-B-C). Also, on a much broader scale, this rally from .8122 was the first wave of what will likely be a long term 5 wave bull sequence. This correction then is a second wave, which are often deep retracements. We could ultimately see the AUDCAD trade down to the 61.8% of .8122-.9519 at .9657 before the next leg up occurs.

AUDJPY - The double doji on the weekly combined with the psychologically important 100.00 figure gives scope to a reversal. MACD (daily) sports a recent bearish crossover and RSI (daily) has declined from above 70. The 20 day SMA has supported price so far but coming under there would indicate additional bearish potential. From an Elliott Wave standpoint, an extended 5th wave and 5 wave bullish sequence may be complete at 100.06. The consolidation that has taken place since has been waves A-B of an A-B-C correction. Wave C may be under way now and should come under 97.43. Price needs to remain below 99.85 for this interpretation to remain valid.

AUDNZD - The AUDNZD has been trading in a choppy range since late December 2006 between 1.1055 and 1.1484. With price at the bottom of this range, risk is now skewed to the upside. A break and directional bias comes on a decline below the January low of 1.1055 or a rally through the March high of 1.1484. A glance at the monthly suggests that the break will be to the downside as the previous trend is down.