The AUDCAD exceeded the April 2007 high yesterday, confirming that a 3rd wave advance that will eventually exceed 1.05 is underway. The uptrend is established, and a dip to support would present a high probability long term opportunity.
The decline from 1.0546 to .8119 in the AUDCAD is clearly a 3 wave decline (A-B-C). As such, 1.0546 should eventually be exceeded. The rally from .8119 to .9514 and subsequent decline to .8271 are waves 1 and 2 in the next bull cycle that will eventually exceed 1.0546. Also, the break of resistance lines presents a clear long term break out opportunity.
Zooming in the daily should help us time this trade. The rally from .8119 to .9514 was in 5 waves and the decline to .8271 was clearly a 3 wave correction. The rally from .8271 could be a leading diagonal as wave 1 of the next 5 wave advance. If this count is correct, then the AUDCAD will decline and test former support near .91. A deeper correction could see the 200 day SMA near .89. In summary, expect the AUDCAD to decline for the next few weeks before the longer term (and most powerful part of the) advance resumes.
