The a$ may be giving an early indication of a potentially important reversal across a more broad range of financial markets. As been mentioning over the last few days on my scrolling technical commentary at www.fxa.com/solin/comments.htm (email me if you need a password), a$ has consolidated from the Friday test of the very important support at the bullish trendline from July/base of the potentially multi-month rising wedge (then at .9060). However, the 5 wave fall from the Nov 16th high at .9405 (see numbering on hourly chart below), suggests that the downside is not “complete”, and with a resumption of the declines ahead. More importantly however, this suggests a downside break of that key bullish trendline since July/base of the multi-month wedge (see daily chart/2nd chart below). These patterns resolve sharply and raises the potential for a downside acceleration on a break below. Note too that the daily macd on the a$ adds weight to the view of further downside ahead. No doubt other markets would notice
such a move (if it does indeed occur) and suggests that the a$ could be the “trigger” for a more significant reversal across a number of additional financial markets (broader US$, stocks, gold, oil, etc…). Point for other markets, is to keep a close eye on the a$ and that key support area. More specifically in the a$, still short from the Oct 29th at . 9155 for the downside break of the wedge. For now, would continue to stop on a close above the rising trendline from Dec (currently at .9485/00), as there is some risk for more topping first.
Longer term, no change as the market is also seen within the final upleg in the rally at least the Nov 2008 low at .6080 (wave V, see numbering on weekly chart/3rd chart below), with at least 3-6 months of correcting lower and minimum 12-14 big figure pullback after (and potentially move). Switched the longer term bias to the bearish side on Nov 18th at .9300..
