Every Elliottician is more than happy, when he spots five waves in one direction, followed by three waves in the opposite. Especially if it is on a big enough time-frame chart.The one given below fits perfectly into this description. It shows the above-mentioned 5-3 Elliott Wave cycle on the daily chart of AUDJPY.
AUDJPY declined in five waves from 105.40 to as low as 86.30 and has been recovering ever since. But this recovery consists of only three waves, labeled A-B-C, where C does not seem to be finished yet. It looks like it will take the form of an ending diagonal, thus pushing prices up to the 61.8% Fibonacci level around 98.00. If this is the correct count, the next two years may not be very good for AUDJPY, because once 98.00 is reached, another strong sell-off should be expected. This count would become invalid, if prices go back up to the start of the impulsive decline at 105.40. As long as this level holds, we are bearish.
