The Australian Dollar crosses continue to decline, but in a corrective manner. In particular, the AUDCHF should form a secondary low in the next few week(s).
Bigger picture, the drop from 1.0823 is either a completed A-B-C decline, is wave A of a triangle, or wave C is still underway from near 1.0140. The rally from .8870 counts well as an impulse, indicating that the longer term trend is likely up. We wrote last week to “expect weakness below .9658 before any sizeable rally attempt. Fibo support begins at .9618 (also the 4th wave of two less degrees) and extends to .9332.” The AUDCHF has come under .9658, reaching .9540 today before bouncing. Our preferred count calls for a bottom to form before .8870 and a subsequent rally through 1.0081.
The long term uptrend remains intact but we do expect continues weakness short term. The confluence of the 200 day SMA / 38.2% of .8271-.9842 at .9242 should be strong support.
We wrote last week that “the move is clearly vertical, and such moves are prone to violent corrections. If a correction does unfold, then support begins at 1.2415. The continued divergence with between rate of change and price suggest that a correction is likely.” Expect weakness to continue for weeks. Fibo support does not begin until 1.2273.
TREND ANALYSIS is based on a rolling pivot model. LONG TERM TREND is determined by the last 3 months of price data (high, low, close). SHORT TERM TREND is determined by the last 4 weeks of price data (high, low, close). R3, R2, R1, PL, PH, S1, S2, and S3 are provided to aid in identifying entries and exits. These are objective measures and our subjective analysis (STRATEGY) may differ.
SCHEDULE
Monday: EURGBP, EURCHF, EURCAD, EURAUD, EURNZD
Tuesday: EURJPY, GBPJPY, CHFJPY, CADJPY, AUDJPY, NZDJPY
Wednesday: GBPCHF, GBPCAD, GBPAUD, GBPNZD
Thursday: AUDCHF, AUDCAD, AUDNZD
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