Elliott Wave - USD/CAD, AUD/USD, Oil

Euro found the support yesterday just below 1.4700 as we previously discussed. It looks like prices still have enough strength to continue higher to 1.4900. Yesterday we also mentioned two possible wave counts on Usd/Cad; the market is still trading in bear channel or flag formation. I will show you the wave update later. After the dollar consolidation this week, we will check the Oil chart to explore further the possible reasons for the temporary dollar weakness.

Today's Charts

Oil

As you can see below it certainly looks like a three wave count. This however is not important right now, but the significant support around $112.20 per barrel is. The daily candles have tested this area several times in the last few days. Yesterdays closed candle confirmed the breakout through the upper trend line resistance, which held prices for more than a month. We can expect a technical test of new prices around the resistance at 121.00. If that is the case it will be dollar negative and the 1.4900 euro level mentioned yesterday on Eur/Usd could be very close.

Usd/Cad

We could still see more U.S. dollar weakness against the Canadian dollar. The cad wave count has changed a little. After the zig-zag in wave (w) prices made a flat correction in wave (x) and now we should see the last three moves in wave (y), before the market looks to trade higher again. The low of wave IV could be around the 1.0500 level. If the prices continue down today, then we can expect some aggressive buyers around the lower trend-line of the channel. They may try to push U.S. dollar back up to new highs on the pair. The trading strategy for this pair is very simple right now; buy on support and sell at the resistance with small risk. The traders should also pay attention to the MACD cross, before they get involved again, it is signaling short, and also keep in mind the negative Usd story that comes off stronger oil prices.

Aud/Usd

This pair looks really interesting with the overlapping waves since 13th of August. We reported the possible triangle in wave IV few days back, the price structure is showing the triangle in blue wave B). Traders should keep an eye on the resistance of wave B of the triangle, any move above it will probably bring in the 0.8850 level, where we have C) equal to A) and also the 161.8% extension of the triangle. If we are wrong on this one, then the chances for trading short could be after the breakthrough on the lower support line of the triangle.

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