A$, Still Targeting New Lows...

A$ continues to chop within the .6005/.7010 that has been in place since late Oct. With no signs that a more important bottom is in place "pattern-wise" (5 waves up on the short term charts for example), suggests that the last month of trade is a large correction/ consolidation and with eventual new lows after. Note too the 5 wave fall from the .7010 high also suggests that the bigger picture downside is not "complete", and adds weight to the view of eventual new lows below .6005. For now want to be short for the bullish trendline from Oct 27th (currently at .6075/85), .6005 and below, and would reshort here (currently at .6425). Initially stop on a close above the bearish trendline from Nov 10th (currently at .6530/50, a good risk/reward). Note too that even a close above there would not abort the view of eventual new lows, but would suggest more ranging back to the bearish trendline from early Nov first (currently at .6840, and would be seen as a chance to reshort). Resistance before there is seen at .6610 while nearby support is seen at .6335 (yesterday's low). Note, took profits on the late Oct short at .6685 on last week's close above the bearish trendline from mid Oct (then at .6435, closed at .6540 for a 145 tick profit).

Longer term, the long held bearish view since the Aug break of the large rising wedge (then near .9500, warned numerous times that they resolve sharply), remains in place. However, the market is oversold after the sharp tumble since the July high at .9845 (down about 40%) and suggests that risk is rising for at least a few months of a snapback and 15 big figure bounce. Note too that the market appears to be "probing" for a bottom and suggests that further new lows below .6005, may be a limited fall and part of a longer term bottoming (see "ideal" scenario in red on weekly chart/2nd chart below). For now, would maintain the long held bearish bias but would be looking for better signs of a more important bottom on new lows below .6005.

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.