Jamie's Pick: 05/12/11
I remain bullish the USD - especially against the commodity currencies.
“The rally from 10536 is viewed as a B wave within a larger correction. As such, expectations are for price to roll over in wave C this week.” Wave C in the AUDUSD is underway. An objective is the 100% extension of the decline from 11011 at 10413. This level intersects with parallel channel support on May 16th.
I remain bearish the NZDUSD although it is holding up quite well. Divergence at the recent top combined with an impulsive decline (5 waves) and corrective advance (3 waves) gives scope to a sharp drop in either a 3rd or C wave. Objectives are the 100% extension at 7666 (also 100 day SMA) and 2/18 high) and the 7500 area – which is defined by the 61.8% retracement of the rally from 7114, 161.8% extension of the decline from the top and 200 day MA. The near term head and shoulders pattern bolsters the bearish view. The 100% extension intersects parallel channel support on May16th.
The USDCAD spiked lower on news yesterday morning and formed what appears to be the right shoulder of an inverse head and shoulders pattern. What’s more, price also tested the topside of former trendline resistance and held. Look higher towards the 100% objective at 9780 – which intersects channel resistance on (guess when….) May 16th.
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