Friday, May 22, 2009

Australian Dollar / US Dollar-New Zealand Dollar / US Dollar

I wrote yesterday that “wave v of C (and therefore wave C) as well as the entire rally from the October low is close to complete. The risk of a top and reversal is high.” I favor weakness and there is short term resistance at .7720. Coming under the ii-iv support line would significantly increase the likelihood that a top is in place.

The NZDUSD is lagging the AUDUSD. That the NZDUSD has not made a new high and the AUDUSD has may mark a non-confirmation…a divergence. There is divergence as well with daily RSI. Structurally, the NZDUSD rally from .5831 may be a truncated 5th wave (wave v of C in this case). I am on the lookout for a top and reversal.

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