The Australian Dollar crosses are testing support levels that may lead to at least short term reversals.
The decline from the November 2007 high was corrective and the advance from 88.70 (2008 low) exhibits impulsive characteristics (rate of change, etc). Additionally, the drop from near 100 is in 3 waves to this point. This leaves the AUDCHF vulnerable to a rally above 100.42 in the weeks ahead. Risk should be kept tight on bullish plays as the 200 day SMA is pointing down, indicating that the larger trend is down.
If a larger triangle is unfolding from the 1996 high, then the AUDCAD will eventually drop below the 2006 low of .8118 to complete wave C of the triangle. The bearish trend is intact as long as price is below .9114. .8750 is potential resistance.
The AUDNZD should turn up from above 117.91 in order to complete a 5th wave in the 5 wave bull sequence from 111.46. The level that we have cited as support for wave 4 (1.2119) is very close to current price.
Jamie Saettele writes Forex Technicals: The Day Ahead, Monday-Thursday (published at 6 pm EST), Daily Technicals every weekday morning (9 am EST), COT analysis (published Monday mornings), and analysis of currency crosses throughout the week. He is also the author of Sentiment in the Forex Market.
Contact at jsaettele@dailyfx.com
