EURAUD EURCAD EURNZD
Commentary – We wrote last week that “we would rather see a deeper correction in wave 2 from 1.7159. Still, there is enough evidence to suggest that the EURAUD is headed higher in a 3rd wave.” The EURAUD has declined so a deeper correction probably is underway. We favored a deeper correction because wave 5 of the 1.5491-1.7159 rally was extended, and extended 5ths are often fully retraced. 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). (note, W-X--Y indicates that a larger complex correction is unfolding). This is a pair that we have focused on in the Elliott wave forum recently.
Strategy – Getting bullish near 1.6150
Commentary – Last week, we wrote that “there is little reason not to treat the rally from 1.4162 as wave 3 or C in a bull cycle from 1.3285. In fact, risk can be kept to 1.4477. A rally through 1.5029 would support the idea that wave 3 higher was underway. The initial bullish objective is the 100% extension of 1.3285-1.5029/1.4162 at 1.5906.” There is no change to the outlook for much higher prices as price has broken through 1.5029.
Strategy – Bullish, against 1.4477, target 1.5890
Commentary – A triangle is unfolding from the September high at 2.0056. Triangles unfold in 5 waves (a-b-c-d-e) and wave c is close to complete. Therefore, expect additional consolidation in waves e and d before a terminal thrust higher in larger wave C completes the entire rally from the July low at 1.7029. We will monitor this pair and look to play the breakout.
Strategy – Flat