The Australian dollar crosses are oversold near term and should turn higher. The AUDCAD looks like the best opportunity to play a short term bounce.
The decline from the November 2007 high was corrective and the advance from 88.70 (2008 low) exhibits impulsive characteristics (rate of change, etc). Additionally, the drop from near 100 is in 3 waves to this point. This leaves the AUDCHF vulnerable to a rally above 100.42 in the weeks ahead. The January low provided support recently as well in what may be the two shoulders of an inverse head and shoulders pattern.
As we posited in detail last week, the long term trend is likely down. However, a short term correction is underway that should reach the 92.62-94.84 area (Fibonacci zone). That the decline from 98.53 is in 5 waves confirms our bearish bias (longer term).
The AUDNZD should turn up from above 117.91 in order to complete a 5th wave in the 5 wave bull sequence from 111.46. The level that we have cited as support for wave 4 (1.2119) is very close to current price.
Jamie Saettele writes Forex Technicals: The Day Ahead, Monday-Thursday (published at 6 pm EST), Daily Technicals 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. Contact at jsaettele@dailyfx.com
Jamie Saettele writes Forex Technicals: The Day Ahead, Monday-Thursday (published at 6 pm EST), Daily Technicals 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.
Contact at jsaettele@dailyfx.com