Mid-trade analysis: AUDJPY (short)
Our short on AUDJPY is proceeding basically according to plan. The market action since Friday has allowed us to update our previous wave count. What we labelled as a five-wave impulse last week turned out to be just wave 3 of a larger 5-wave structure. Now that the higher-degree impulse has finished, the market is correcting back up toward the Fibonacci zone of 81.41 to 81.76.
Typically, a second (or B) wave corrects to between the .500 and .618 Fibonacci retracement levels. Therefore, I estimate that price will reach 81.58 to 81.76 over the next couple of trading sessions. However, as we are expecting a third wave down to follow, the momentum is definitely in the bears’ favor and that means price could break lower at any time. We are well-positioned for both possibilities.
saigonfx 