AUD/CAD
Commentary – We wrote last week that “the decline from .9519 is a large correction and is unfolding as a zigzag. Wave A is from .9519 to .9020 and wave B is from .9020 to .9290. Wave C would equal wave A at .8789. The 61.8% fibo of .8123-.9518 is at .8656 and is potential support.” Today’s low is at .8749, very close to the measured objective of .8789. That may be the low but a rally through the wave A low at .9020 would confirm our suspicion. That said, the rally from .8749 is inspiring and a rally through the 5/29 high at .8893 would put an end to the series of lower highs. A decline below .8749 negates the bullish setup and exposes the 61.8% of .8123-.9518 at .8656.

Strategy – Bullish on a rally through .8893, against .8749, targeting above .9520 (potentially much higher levels)

AUD/JPY
Commentary – The AUD/JPY broke below the short term support line that we wrote about last week, so there is bearish potential. However, the decline from the 5/15 high at 100.42 is a 3 wave flat (corrective) and price continues to be supported by the 21-day SMA. Looking at the separate legs of the cross; the AUD/USD looks bullish following the break above a short term resistance line today and the USDJPY is consolidating in what may be a triangle before a thrust to a new high takes place. Back to AUD/JPY – as long as 98.90 holds, the trend is bullish. Connecting a line parallel to the one drawn off of the March 2006 and March 2007 lows from the December 2005 high projects and end to the AUD/JPY bull trend near 101.45 this week (101.56 next week).

Strategy – Looking for a new high (above 100.42) to tag the mentioned channel line before a reversal.

AUD/NZD
Commentary – The AUD/NZD remains rangebound within a triangle that has persisted for most of the year. Given that the preceding trend was down, probability favors a bearish break from the triangle. Potential support on a break is at the 78.6% of 1.0430-1.2493 at 1.0874 (just above the 2/10/2006 low of 1.0834). 1.1387 must hold in order for the triangle to remain intact.

Strategy – Short term bearish against 1.1387 targeting 1.1000 and 1.0900.

Jamie Saettele is a Technical Currency Analyst for FXCM.