NZDJPY Technical Analysis August 7/2018
NZDJPY is on a lower low lower high sequence since July 27/2017. Looking at the Daily time frame chart we can clearly see a series of AB=CD bullish patterns which can possibly signal that a potential bounce higher can happen if the pair can hit the pattern reversal BUY trigger levels. An AB=CD pattern basically means the length of A to B equals the same length of C to D which in other terms means “equal legs”. In the chart below, another extension lower will form 11 swings from the July 2017 high and at EWF we always look for possible BUYS or SELLS on the 3, 7, 11 etc. swings for possible terminations of an Elliott Wave correction sequence. Using the AB=CD equal legs pattern, we can also see a series of them that triggers BUYS on the next swing lower at the AB=CD 1.0% levels (Blue, Green, Orange, Purple). Traders need to also watch for the break above Bullish Wedge Pattern (Black). A break above the black wedge pattern will also signal the pair has possibly bottomed out and confirm the bounce higher has started. (Also note Bullish AB=CD Pattern (Pink) already has hit the point D Fib. Extension 1.0% reversal level) If NZDJPY does not make another low and breaks above 76.30 level it is possible that the pair bottomed out and the bounce higher has commenced. Traders need to watch and be patient to see what NZDJPY will do in the coming days and weeks and watch if the pair will make another swing lower to trigger BUYS at the point D’s of the bullish AB=CD equal leg patterns and bottom out.
NZDJPY Daily Chart 8.7.2018
Of course, like any strategy/technique, there will be times when the strategy/technique fails so proper money/risk management should always be used on every trade. Hope you enjoyed this article and follow me on Twitter for updates and questions> @AidanFX or chat me on Skype > EWF Aidan Chan
*** Always use proper risk/money management according to your account size ***
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