Forex Video Technical Update 5/14/2011 - Scenarios in the AUD/USD, AUD/JPY and AUD/NZD

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original article: http://www.fxtimes.com/?p=38898

The Australian Dollar has been dominating the currency markets with its correlation to gold as well as support from a relatively sound economy. Against the USD, the Aussie has been consolidating since the start of May, and is on a 3-wave decline. The AUD/JPY has been consolidating since April 10, after a rally form Mid-March. It is in medium-term ranging mode with some short-term bearish bias. Meanwhile, the AUD/NZD has been consolidating since March 7, and is in a short-term bearish attempt. Lets take a look at these charts.
AUD/USD
- The AUD/USD was turned from 1.07 after a initially rallying from support factors. The failed rally attempt represents the intent of the market to hammer at the current support cluster right above 1.0500.
- The strong bearish candle suggests the bearish continuation through the 1.0500 level. If this materializes, the next support cluster is right above 1.0400. A wave equality projection targets 1.0415.
- Looking at the daily chart shows that the 50% retracement of the March rally is near 1.0350. If the market is bullish from either 1.0415 or 1.0350, the bearish scenario will be tested with resistance near 1.06. If the market remains below 1.06, the next support is near the 1.020 (61.8% retracement) level.

AUD/JPY
- The AUD/JPY is heading back towards 84.30, the May low. We see that the 4H RSI remains below 60, and is attempting to break below 40 towards 30. This is a sign of bearish continuation.
- IF the market breaks below 84.30, a wave equality projection targets 82.88, which is where the 200SMA reside in the daily chart.
- The market is in medium term consolidation, but can turn bearish if the 80.00 level (near 61.8% retracement) does not hold. We can then targets 75.00.
- Note that the market is ranging. A concept of the ranging mode is that the further the market is from mean price action, the more likely it will reverse back towards it. Right now, the mean price action represented by the 200SMA in the daily is near 82.88.

AUD/NZD
- The AUD/NZD pair broke below a rising trendline this past week, stalling an attempt to retest the 1.38 high. The RSI reading in the daily chart shows maintenance of the bearish momentum. A swing projection targets 1.3090. also a pivot back in January and February.
- Although the daily candles represent a bearish dominance at least in the short-term, a full swing projection might not materialize as there is a support cluster at 1.32. This is near 61.8% retracement and the 200SMA in the daily chart. If the market is able to reach the 1.3090 projection and subsequently remains below 1.32, it can slide towards 1.28.
- On the upside, if the market breaks back above 1.3520, there is a chance the market is simply flattening with support at 1.34 and resistance at 1.37. A break above 1.37 eyes 1.38, above which, the market eyes 1.42 in the medium term.

Fan Yang CMT
Chief Technical Strategist
FXTimes

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