AUD/CAD
 
Commentary – “We are treating the rally from .8746 as wave B in a correction from .9513. We favor this view because the rally from .8749 is not a clean 5 wave impulse that would typically signal the beginning of a 3rd wave. Wave C should be underway now and we expect the pair to drop below .8746 in order to complete larger wave 2 in the next several weeks. We expect the bottom of wave 2 to be within the .8503-.8653 zone. .8503 is where wave C of the correction would equal wave A. .8653 is the 61.8% of .8119-.9513.”

Strategy – Waiting for wave 2 to finish below .8746 so that we can align with wave 3 higher

AUD/JPY
 
Commentary – We were looking for the correction to end near 104.00 last week before the next big leg down. The top came at 103.63 and the AUD/JPY has plummeted since. Price is close to testing the 100% extension of 107.70-99.45/103.63 at 95.37. Based on the outlook for the USD/JPY and the AUD/USD (both may be close to near term bottoms), this is not the time to get aggressive. We expect some consolidation/correction before a test of 95.37. At this point, we are unsure of the near term downside potential.

Strategy – Remain bearish, move risk to 100.57 (from 107.70), targets at 95.37 and 90.27

AUD/NZD
 
Commentary – We wrote last week that “the pattern is not especially clear and the pair is coming up on potential resistance from a line drawn off of the November 27,2006 and May 10, 2007 highs. A daily close above this line instills confidence in the bullish bias.” The AUD/NZD closed above the line on August 9 (last Thursday) and the pair has rallied to above 1.1500. The next level of potential resistance is the October, 2006 high at 1.1659. Look for a correction to bottom near the 23.6% of 1.0911-1.1584 at 1.1425 (or the 38.2% at 1.1327).

Strategy – Remain bullish, move risk to 1.1124, target TBD

Jamie Saettele is a Technical Currency Analyst for FXCM.