The Australian Dollar crosses are consolidating following large rallies from significant lows. The consolidation should lead to additional strength.
I showed the daily chart last week and longer term downtrend, mentioning that “as long as price is below the line drawn off of the November 2007 and July 2008 highs, the trend is considered down. Potential resistance is in the .9320-.9616 zone.” A correction is underway as there are 5 waves up from .8620. A B wave is underway now and may be complete .8992. Coming under there should find Fibonacci support at .8950 or .8871. Wave C would then end above .9293. .9476 is the 61.8% of 1.0047-.8620 and is potential resistance.
The long term triangle appears to be playing out. “The AUDCAD will eventually drop below the 2006 low of .8118 to complete wave C of the triangle.” The rally from .8386 is considered corrective but may not be the entire correction of the drop from .9853 since the rally failed to retrace even 38.2%. Favor the downside as long as price is below .8878 but be cognizant of the fact that a larger correction could play out and reach .9090 or .9265 (50% and 61.8%).
The AUDNZD rally from 1.1811 is probably a 5th wave that will complete a larger C wave before a significant top and reversal. The advance should continue over the next several weeks (and perhaps longer) and break above 1.2968.
[B]Jamie Saettele writes [I]Forex Technicals: The Day Ahead[/I], Monday-Thursday (published at 6 pm EST), [I]Daily Technicals [/I]every weekday morning (9 am EST), COT analysis (published Monday mornings), and analysis of currency crosses throughout the week. He is also the author of Sentiment in the Forex Market.[/B]
[B][/B]
[B]Contact at <[email protected]>[/B]