Euro Commodity Crosses Should Continue Falling


Commentary – The EURAUD remains trapped in the correction that we spoke of last week. “With a 5 wave rally complete at 1.7159, the EURAUD is declining in a corrective manner. Wave 5 of the 1.5491-1.7159 rally was extended, therefore this decline has the potential to reach the origin of the extended 5th wave, which is at 1.6171. This is just in front of the 61.8% of 1.5491-1.7159 at 1.6128. Potential support prior to that level is the 50% at 1.6325 (11/19 low is at 1.6316). Wave a of an a-b-c correction is complete at 1.6528 and wave b is at 1.7000. Wave c is underway now towards the mentioned support levels.”
Strategy – Get bullish in 1.6128/1.6325 zone, against 1.5491, target much higher (longer term trade idea)

Commentary – We wrote last week that “a setback is due towards at least Fibo support that doesn’t begin until 1.4249. We do expect a correction to this level over the next few weeks.” The EURCAD has declined and tested former congestion in the 1.4250 area yesterday. Expect some consolidation/pullback in wave iv of c before a decline completes the entire correction from near 1.5000. 1.3880 is the 61.8% of the previous rally and 1.4000 is former congestion and a psychological level. Near term resistance is in the 1.4430/1.4500 area.
Strategy – Exit bearish position

Commentary – We maintain that wave c of larger wave 2 within a 5 wave bullish cycle is underway towards below 1.8209. A potential terminus for wave 2 is 1.7893. This is where wave c would equal wave a. Near term, we expect price to remain below 1.9167. Do not be fooled by a break of the 200 day SMA (shown on the chart). We do expect that price breaks lower but then reverses higher from the mentioned objective.
Strategy – Flat