AUDJPY Preparing for the Next Sell-Off?

AUDJPY, currently trading around 81.25, has been rising since February 11th, when the pair touched 77.58. What should we be thinking about this recovery and how high could we expect it to travel? In order to be able to answer this question, we will apply the Elliott Wave Principle to the hourly chart of AUDJPY, where we can see not only the recent rally, but the preceding decline as well. By the way, its wave structure is far more important. See it below.
audjpy 22.2.16
The wave structure of the sell-off between 86.35 and 77.58 is as visible as an impulse can get. In addition, the sub-waves of waves (1) and (3) are also pretty obvious. According to the theory, every such impulse is followed by a three-wave correction in the opposite direction. In our opinion, that is exactly what has been developing since February 11th. We believe an (A)-(B)-(C) zig-zag to the north is now under construction. Its wave (C) still has room to grow, probably to the 61.8% Fibonacci level, which is supposed to provide strong resistance. In other words, the area near 83.00 is where the bears should return, since the whole 5-3 wave cycle would be complete. As long as the invalidation level at 86.35 holds, AUDJPY is likely to weaken towards 77.50 or lower.

New to Elliott Wave?

Elliott Wave principle offers a completely new understanding of what the nature of the markets is, what drives them and what can be derived from their movement. This course is for those of you, who have been looking for an honest Elliott Wave guide, describing the method’s advantages over other trading tools, but not hiding its weaknesses.

Check Video Course    or     Check our eBook


See our Video Course
or check our eBook

Last year over 60k readers trusted EWM Interactive to help them in their trading decisions.

I’m very happy i discovered your service. Thanks so much and keep up the good work!

- Xavier N.

Just loving your analysis. Thank you so much, really wished you add some more currencies to your list You have a client for life :)

- J. Kotzee

I love the way EWM does business: response times & overall friendly demeanor are fantastic... and the prices are very fair. The trade recommendations read like like they come from a seasoned trader that is used to winning. Couldn't ask for more.

- C. Montgomery

I love the way EWM does business: response times & overall friendly demeanor are fantastic... and the prices are very fair. The trade recommendations read like like they come from a seasoned trader that is used to winning. Couldn't ask for more.

- C. Montgomery

I’m very happy i discovered your service. Thanks so much and keep up the good work!

- C. Montgomery

Just loving your analysis. Thank you so much, really wished you add some more currencies to your list You have a client for life :)

- C. Montgomery