Australian Dollar Crosses Make or Break Time
Commentary – Please view last week’s chart and commentary for the long term picture and analysis. This week, we want to show the short term pattern from the December low (12/28) at .8536. Since then, the AUDCAD traced out a 5 wave advance which was followed by a clear 3 wave decline. The bias remains bullish as long as price is above .8536.
Strategy – Bullish, against .8536, target TBD
Commentary – Our initial objective remains at the 100% extension of 107.84-92.99/100.15 at 85.31 although bearish potential is much greater. At this point, the larger bearish bias is intact as long as price is below 98.35. If price does exceed 98.35, then we would expect price to exceed 100.15 in order to complete an expanded flat. In this case, the bigger picture is still bearish but the next big drop is simply delayed.
Strategy – Bearish, from 98.35, target 85.50
Commentary – We have been patient but this pair is beginning to test that patience. We still maintain that wave 3 (or C) higher is underway as long as price is above 1.1149. One reason that we do not mind waiting so long is that the bullish potential is significant. The minimum objective is just above 1.2100 but bullish potential is still greater. The pair is having major problems with the 200 day SMA but the longer term structure does remain bullish (as long as price is above 1.1149).
Strategy – Bullish, against 1.1149, target much higher (above 1.2100)