The Elliott Wave Principle is a forecasting method, based on chart analysis. It postulates that trends move in recognizable patterns, called waves. A five-wave impulse, which indicates the direction of the trend, is followed by a three-wave retracement in the opposite direction. When this 5-3 wave cycle is over, the trend resumes. The pattern could be found on all degrees of trend – from the largest to the smallest. On the 30-minute chart of AUDJPY, there seems to be good enough example of one such pattern.
A five-wave rally from 85.42 to 87.57 precedes an A-B-C corrective pull-back, where wave B appears to be a triangle. If this is the correct count, the AUDJPY exchange rate is supposed to continue higher from now on. 88.00 looks like a good first target for the bulls, as long as the invalidation level at 85.42 holds.