In this blog, we will take a look at CADJPY Elliott Wave View in the short-term. Rally from 81.36 (3/5/2018) to 83.51 (3/11/2018) was a double zig-zag Elliott wave structure where wave ((w))was sub-divided as (a)-(b)-(c) and ended at 82.56, wave ((x)) ended at 81.39 and wave ((y)) was also sub-divided as (a)-(b)-(c) and completed at 83.51. Down from that peak, we can see CADJPY drop was in 5 waves where wave (i) ended at 82.71, wave (ii) was a deep retracement of wave (i) but as per Elliott wave rules, wave (ii) retraced less than 100% of wave (i) and was followed by a strong decline in wave (iii) which ended at 82.00. This was just past 161.8% Fibonacci extension of wave (i) related to wave (ii). Wave (iv) bounce was a running FLAT Elliott Wave structure and completed at 82.31. Down from there, wave (v) lower has reached 0.764 Fibonacci extension (81.29) of waves (i) + (iii) so we expect wave (v) to end soon. As the mid-term CADJPY Elliott Wave View (not shown) has the pair in an impulsive decline from 91.58 (1/5/2018) peak, we are labelling this 5 waves decline from 83.51 as wave ((i)) of 5.
According to Elliott Wave Theory, after a 5 waves decline, there should be a 3 waves bounce at least so we expect CADJPY pair to make a corrective wave ((ii)) bounce soon in 3-7-11 swings to correct the decline from 83.51 peak. As bounces fail below 83.50 peak, we would expect the pair to continue lower in wave ((iii)) of 5. This wave count would be invalidated above 83.51 as that could mean pair is still in wave 4 as a FLAT Elliott wave structure and could still later turn lower in wave 5. We don’t like buying the pair in proposed wave ((ii)) bounce.
CADJPY Elliott Wave View – 5 Waves Decline