AUDUSD Nearing Confluence of Resistance above 10200

DailyFX   |  June 19 2012 10:24 EDT

At this point, it’s quite clear that the final leg of the corrective rally that began at the 6/4 low in equities is underway towards slightly higher levels. In FX, this translates to a lower USD on balance.

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“THE MARKET(S)” a.k.a. “RISK” SNAPSHOT - 60 Minute Closes

Prepared by Jamie Saettele, CMT

SPX 500 – Daily Bars

Prepared by Jamie Saettele, CMT

This chart is updated from last week. The text is unchanged. “Most of the correction (rally) is probably complete in price but not time. Slightly more than 50% of the decline has been retraced in just over a week’s time. The decline from the April high consumed 43 days. I’ll dig deeper into the statistics but a quick look at corrective rallies that occur following 5 wave declines from significant tops (1987 and 2007 for example) reveal that the corrective rally tends to consume 1/3 – 1/2 of the time that the decline did. In other words, one would expect the rally from the low to take roughly 14 to 21 days. Projected from the 6/4 low, we get possible topping dates on 6/22 and 7/3.”

SPY ETF – Daily Candles

Prepared by Jamie Saettele, CMT

This is updated from2 weeks ago and last week. At this point, it’s quite clear that the final leg of the corrective rally that began at the 6/4 low is underway towards 137.55. There are also several gaps to keep in mind at 135.53, 136.99, and 138.99. Equivalent 100% extension levels are 1368.93 for the S&P 500 Index and 12918.65 for the Dow.

AUDUSD – Daily

Prepared by Jamie Saettele, CMT

AUDUSD focus remains on the 10225/10240 area (April low, 50% retracement of decline from February high, 100% extension of rally from 9580 and 13 week average) but the advance, notably from 9849, is mature (5 waves). A pullback could test 10050 in wave 4 of C before the assault on the mid 10200s later in the week (see next chart for short term wave count).

AUDUSD – 240 Minute Bars

Prepared by Jamie Saettele, CMT

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