AUDCAD Breakout Has Significant Bullish Potential
Commentary – Our commentary for the last month (at least) has been this “For months, we have been focusing on the long term 5 wave rally from .8165-.9514 which was followed by a 3 wave decline to .8375. The AUDCAD may finally be breaking higher now. The bullish count treats the choppy rally from .8271 as a series of 1s and 2s. A break above .8986 confirms that wave 3 higher is underway and risk would be the December low at .8536. The initial bullish target is above .9514.” That series of 1s and 2s did indeed give way to what we are labeling as wave 3. As mentioned, the minimum objective is above .9514 but bullish potential is much greater, especially given the counts in both the USDCAD and the AUSDUSD.
Strategy – Get bullish near .8870, against .8536, target TBD
Commentary – We wrote last week that “wave 3 lower within a 5 wave bear cycle from 107.84 is most likely underway now. The bearish bias is strong as long as price is below 100.15. Within wave 3, a small wave i is complete at 94.36 and wave ii is underway now. A potential terminus for the corrective advance is 97.94 (61.8% of 100.15-94.36). Look for a top and reversal near there.” The top was at 98.35 and the AUDJPY has indeed plummeted recently before rallying significantly off of support from the 11/26 low. At this point, remain bearish as long as price is below 98.35. A rally through there means that a larger correction is still underway.
Strategy – Bearisg, move risk to 98.35 (from100.15), target is close to 85.00
Commentary – We maintain that wave 3 (or C) higher is underway. The minimum objective is just above 1.2100 but bullish potential is far greater. The pair is having major problems with the 200 day SMA but the longer term structure is bullish (and very bullish) as long as price is above 1.1149.
Strategy – Bullish, against 1.1149, target much higher (above 1.2100)