AUDNZD Putting In Significant Low
Commentary – 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. However, since the decline into .8375, price action has been very choppy and the pattern is unclear. We thought that maybe a triangle was playing out last week but the rally through .8892 negates that possibility. One possibility is that larger wave 3 is underway and that waves wave 2 of larger 3 unfolded as an expanded flat (see the labels on the chart). The AUDCAD is pressing up against the 200 day SMA and a daily close would be a sign of strength; so watch out for acceleration higher in wave 3.
Strategy – Flat for now (looking for a long entry….keep posted to FXCMTR for technical alerts)
Commentary – Last week, we wrote that “the best opportunity in this pair will come on the larger wave 2 (or B) setback that could bring price back to the 101.00 area. This would offer the opportunity to get bearish for wave 3 (or C ) lower. This is likely to take a few weeks to set up though. There is no change in the outlook as this is exactly what is happening. Wave v (and larger 1) ended at 92.99 and larger wave 2 is on its way to resistance near 101.09 (11/14 high). This level is very close to the 50% and 61.8% of 107.81-92.99 at 100.41/102.16.” The high today is at 100.03 but expect strength to persist to the mentioned objectives in the 100.41/102.16 zone. Look for a top and reversal near there.
Strategy – Bullish move risk to 96.27 (from 95.25), target 100.41
Commentary – The AUDNZD does appear to be nearing completion of larger wave 2 (expanded flat). A potential test of the 78.6% of 1.0904-1.2031 at 1.1146 is possible before a strong rally begins that will take price through 1.2100 over several weeks. The bias is bullish as long as price is above 1.0904.
Strategy – Bullish, against 1.0905, target much higher (above 1.2100)