Australian Dollar Crosses Face Resistance

AUDCHF Daily Bars

If 1.0823 holds, then the count in black is valid. That count indicates that the AUDCHF is in wave C of a large correction that will eventually come under .8882. However, with price so close to breaching 1.0823, we are presenting the alternate (in red); which suggests that the advance from .8882 is wave B of a triangle.

AUDCAD Weekly Bars

The rally from .8271 is roughly equal to the .8119-.9514 advance and the rally stalled at the 61.8% of the 1.0546.8119 decline. These measurements bring to the forefront the possibility that a large triangle is unfolding since the April 2001 low. In a triangle, the next leg would be lower in wave D towards .88 or so. The alternate count treats the advance from .8819 and subsequent decline as waves 1 and 2 in a bull cycle. We favor the triangle scenario given the unmistakable 3 wave movements and Fibonacci measurements.

AUDNZD Daily Bars

Expect the AUDNZD to complete the small 4th wave near the 38.2% of 1.1331-1.2413 at 1.20. This level is former congestion. It is also possible that a triangle is unfolding from the wave iii top (1.2412). Either way, sideways / downward on balance action is expected for the next few weeks.

Tell us what you think about this report: contact the strategist about the article at jsaettele@dailyfx.com

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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Quiet Open To Week

ForexGen lacked motivation in a quiet Asian session. EurUsd bounced around 1.5761 -1.5817 levels while UsdJpy trended sharply upward from 98.82 to 100.18. Friday ended on a mixed note with stock markets weaker due to some weak US data (Michigan index) and energy and commodities price declined slightly. Over the weekend WSJ reported that Treasury Secretary Paulson would announce today "sweeping structural changes in the way the government monitors financial markets" giving the Fed broader authority to secure "market stability." While we are skeptical of giving the Fed such broad powers with very little oversight we are bracing for a resurgence of risk appetite and will be focused on short Jpy trades this week. On this theme the BoJ Tankan report Tuesday will be of interest. Listening to comments last week it seems that the leadership vacuum has created a lack of unity on how to deal with the combination of growing price risk and slowing economy. While currently the BoJ has not officially adapted an easing bias the market is still pricing in 14bp cut within the next 12 months. JPY remains in favor due to risk aversion and declining carry appetite but these themes could come under pressure this week. Another currency on our watch list this week is Gbp. BoE's King is also scheduled to speak. During the MPC testimony on the Feb inflation report last week the members were more pessimistic regarding the UK economy then previously. In addition, King voiced clear inflation risks, with CPI around 3%, however due to the extent of the economic downturn, he commented MPC is more inclined to cutting rates. We still believe that market hasn't fully pricing in a full easing cycle by the BoE with rates slipping to 4.00% by end 2008 so the Gbp has additional room to depreciate.

ForexGen provides its institutional clients with incomparable professional and individualized trading services. As a professional online trading service, ForexGen provides several facilities for all kinds of traders. Our corporate and managed trading service performance are based on respect and appreciation which is only achieved by offering intelligent high end trading tools for secure investment. ForexGen is the easiest and fastest gateway for the corporate traders to perform successful trading, which provides a unique institutional investor professional facilities and highly qualified individualized services for the international customer. ForexGen provides advanced online trading software with full corporate trading services. A rich choice of managed accounts are also available, please check our Managed Account Section

ForexGen delivers what traders want: instant order execution, lowest spreads, flexible starting capital, fast deposits and withdrawal, a local support in more than 18 countries, and most of all, solid funds security.

Winning in trading depends on using the right strategy and controlling all the moves. Trading strategies are discussed in details at ForexGen Academy.