A$, No Important Bottom... Yet...

The view in a$ remains unchanged as trade from the Oct 27th low at .6005 is seen as a large correction, and with an eventual resumption of the longer term declines to new lows after. Note too that the "sloppy" series of moves from that low (overlapping 3 leg moves, A-B-C's) and the new sell signal on the daily macd (see bottom of chart below), adds weight to the view that no important bottom is in place. In the Nov 10th email, said to short on a break below the bullish trendline from the Oct 27th low (on an intraday basis) and the market broke below there the next day (shorted, then at .6685). The market has since chopped lower, on way toward the .6005 low and eventually below. However, there remains some risk that this multi-week period of consolidating is not yet "complete". For now, would stop on a close above the week long bearish trendline (currently at .6500/10) as it would greatly increase the likelihood of further chopping back to ceiling of the range at .7010 first (and would be looking to resell at those highs if that does occur).

Longer term, the market is starting to probe for an important bottom after the sharp declines since the July high at .9845, and suggests that risk is rising for at least a few months of correcting higher and 14-15 big figure bounce. However, there are still no signs "pattern-wise" that a bottom of that magnitude is in place, raising the potential for at least some further downside/new lows ahead (see shorter term above). For now, would maintain the long held bearish bias since the Aug break of the large rising wedge (then near .9500, warned numerous times that they resolve sharply), but would be looking for better signs of an important bottom on further downside over the next few weeks/month (see "ideal" scenario in red on weekly chart/2nd chart below).

David Solin
Foreign Exchange Analytics
http://www.fxa.com

Disclaimer: The opinions expressed herein are those of the author and not a recommendation to buy or sell specific securities.