AUD/JPY developed a bullish momentum last week… It seems that this price action was developing a new bullish wave 12345 pattern: it started wave 1 and was followed by the correction of wave 2. Now I think that price is developing for bullish wave 3.
We will review different scenarios as the pair can either bounce for bullish wave 3 or expand the bearish momentum of wave 2.
This article will discuss the wave perceptive and expected scenarios for the pair during the coming days using wave pattern, support, and resistance and SWAT software.
AUD/JPY Wave structure
The below chart shows that the pair developed a strong bullish momentum … In my view, the pair was developing a new 12345 wave pattern: the pair is in wave 3 but it could end this bullish wave soon and start a new wave 4.
And here are the main conclusions:
- Wave 3 can be extended till -27% or -61.8 of fib ratio of wave 1.
- In my view we need to trade bullish wave 5 and wait for wave 4 correction and wave 5 confirmations to take place.
For the moment I expect a small correction for wave 4 and then bullish momentum for wave 5 but we still need to wait for the confirmations of wave 5 to take place before trading this pair… In the next paragraph, we will discuss this development by using SWAT software.
AUD/JPY SWAT CHART
Now it’s time to use the SWAT 4-hour chart to determine the entry points according to the expected wave patterns… SWAT Chart shows bullish momentum but some developments to confirm the setup… Here are the main developments to consider:
- There is bearish divergence which makes the correction is more near to take place.
- My view is to wait for correction then trade the continuation.
- Our target will wizz level 4 and 5.
- I advise traders always to protect their profit or use trailing stops.
So in my view, traders should wait for the confirmation before trading this pair and look for pullback and bullish continuation only as it matches the expected wave.
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