AUD/JPY is fighting to climb up, but I think that the bulls will fail… The bearish direction still seems stronger as the currency pair is in potential bearish wave 5.
The wave 5 does not seem complete as yet and one more lower low seems very likely.
In this article, we will discuss the potential price movements for this week using trend lines, support and resistance, wave pattern and SWAT software.
AUD/JPY Wave Big Picture
AUD/JPY pair is in downtrend since September 2017. It has built 4 waves till now and is currently in a wave 5.
From my point of view, the wave 5 is still progressing due to the below reasons:
- Wave 5 did not yet reach the -27.2% Fibonacci target.
- The internal wave structure within wave 5 does not seem complete as yet.
We will discuss wave 5 separately in order to know whether it’s ended or not.
AUD/JPY Wave 5 Structural
The 4 hour chart shows how the 5th wave from the daily chart is not yet completed because the internal wave structure is indicating a potential wave 4.
Let’s review the main characteristics:
- It seems that the pair confirmed 3 waves.
- The correction of wave 4 is progressing now.
- So I expect the correction of wave 4 to take place before the start of wave 5.
Because of the mentioned reasons, I think that the pair still have more for the down side, and traders must wait for a clear confirmation to tread the rest of the big wave 5.
AUD/JPY 4 Hours Chart Using SWAT Software
Now it’s time to use the SWAT charts to pinpoint potential trade setups within the expected wave structure and patterns.
As the below chart it seems that the pair have a strong bearish direction maybe the pair is trying to make some correction but we agreed to look for sell chances only:
Here is what we we need to see on SWAT software to set our position:
- Need the price to develop a flag pattern and then break the flag pattern, this is our entry.
- Price should be under the 21EMA.