Australian Dollar Prospects Look Bleak

1. AUDCAD
2. AUDJPY
3. AUDNZD

AUDCAD AUD/CAD broke above the 200 day SMA as the move higher has played out as expected.  However, it appears that the initial move higher from the .8119 low is nearing completion and that it is time for a corrective setback.  Both the daily and hourly oscillators exhibit bearish divergence with price at the recent high and the ascent from the .8119 low is a clear 5 waves up (to complete a larger 1^st wave).  Going forward, probability favors a deep correction possibly to the area bound by the 61.8% fibo of .8120-.8644 at .8320 and the 78.6% fibo at .8232.  These levels line up with former support and resistance.  Another potential support is at the 6/9 high of .8379.  There is still the possibility that the pair rallies a bit more maybe to the confluence of the 78.6% fibo of .8825-.8119 / 23.6% fibo of 1.0548-.8119 at .8672/79. 

AUDJPY AUD/JPY has blasted by the wall of resistance at the 61.8% fibo of 91.31-82.06 at 87.77.  There is bearish divergence with oscillators on the hourly, suggesting that the uptrend is exhausting.  Slight divergence with oscillators (and RSI andgt; 70) on the daily favors a turn lower soon also.  Resistance going forward is at the 78.6% fibo of 91.31-82.06 at 89.32.  Initial support is at the 7/18 high at 88.04.      

AUDNZD AUD/NZD has retraced about half of its decline from 1.2358-1.1902 after failing at the 20 day SMA today.  The pair appears to be headed back down to test the 7/18 low at 1.1902.  A double negative divergence (two higher highs in price and two lower lows in RSI) with RSI on the hourly is suggestive of a fall in the pair.  Its also possible that the pair is tracing out a large triangle following the impulsive move to 1.2423 in early May.  If this is the case, then the 1.1902 low will not be tested.  The support line for the triangle would be at about 1.1930 today and the resistance line at about 1.2335.  Additional gains from here would probe the 61.8% fibo of 1.2358-1.1902 at 1.2183.         <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

Glossary of Terms

CCI(20) 20 day Commodity Channel Index

andgt; 0 bullish

0 andgt; bearish

andgt; 100 extremely bullish

-100 andgt; - extremely bearish                                                   

RSI(14) 14 day Relative Strength Index

andgt; 50 bullish

50 andgt; bearish

andgt; 70 overbought

30 andgt; - oversold

MACD ? - MACD slope (MACD MACD[1])

andgt; 0 bullish

0 andgt; - bearish

Mom(8) 8 day Momentum (shorter-term direction)

andgt; 0 bullish

0 andgt; - bearish

ATR(14) 14 day <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />AverageTrueRange (volatility)

Medium 75th percentile* andgt; ATR(14) andgt; 25th percentile*

High - andgt; 75th percentile*

Low 25th percentile* andgt;

ADX(14) 14 day Average Directional Index (directional strength)

andgt; 30 strong

30 andgt; - weak

*measured against past 3 months

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