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This week, I take a long term look at the Australian Dollar crosses to put the historical moves into perspective.

Sometimes, a chart pattern jumps out at you and you see it right away…such is the case with the long term AUDCHF structure.  A 5 wave decline appears to have completed in 1995.  The AUDCAD then traded sideways until dropping to an all-time low last week.  One such count treats the drop to a new low as a B wave (false break).  Once this B wave completes, which  may take weeks if not longer, a sharp advance would ensue.

The AUDCAD has also dropped to an all-time low, but rallied over 1000 pips since registering that low last week.  A line extended from the 1986 and 2001 lows intersects with last week’s low.  Could this be a multi-year low?  It is something worth considering.  Next week, I’ll zoom in on the shorter term structure to see if there are any patterns that shed light on the situation.

Simply, the 1.05 area is significant support for the AUDNZD and has been since the late 1980s.  In the summer of this year, the AUDNZD surged through a long term resistance line, but the break proved false.  Now testing 1.05, the pair is nearing a breaking point.  A long term direction will eventually be established; with a break above the trendline or a break below 1.05.

Jamie Saettele writes Forex Technicals: The Day Ahead, Monday-Thursday (published at 6 pm EST), Daily Technicals every weekday morning (9 am EST), COT analysis (published Monday mornings), and analysis of currency crosses throughout the week.  He is also the author of Sentiment in the Forex Market.