Forex Elliott Wave Forex Market Analysis

AUDJPY Could Develop a Limited Upside


The AUDJPY cross advances in an incomplete upward sequence that belongs to a corrective structural series backed by Monday’s trading session’s euphoric sentiment. The Elliott Wave view unveils the likelihood of a limited upside before resuming its declines.

Market Sentiment

The AUDJPY cross retraces on the overnight Tuesday trading session after the surprising weekly kick-off, which jumped the price over 2.2%, climbing until 77.037, its highest level since September 18th.


The AUDJPY 8-hour chart illustrates the 30-day high and low range, which exposes the participants’ intraday market sentiment. The figure distinguishes the price action consolidating in the extreme bullish sentiment zone, backed by the stock market’s euphoric rally on Monday’s trading session.

The breakout of the last 30-day high of 76.274 during Monday’s trading session raised the participants’ extreme bullish sentiment, expecting further upsides on the cross. Moreover, we see that the price action remains above its 60-period linear weighted moving average, which confirms the bullish bias on the AUDJPY.

Nevertheless, the AUDJPY found resistance below mid-September’s consolidation zone. This market context expects a significative retracement or a consolidation movement before continuing the rally experienced in Monday’s session. Finally, a retracement below the 75.087 level would turn the market sentiment from bullish to bearish.

Technical Overview

The AUDJPY cross advances in an incomplete upward bullish sequence of a lower degree, which belongs to a descending structure that began on August 31st when the price topped on 78.462.

The below 8-hour chart exposes the price action running in an upward wave ((b)) of Minute degree labeled in black, which currently advances its fourth wave of Minuette degree identified in blue. Likewise, according to the Dow Theory, considering that the AUDJPY cross advanced over 66% of the bearish decline, the price should develop a bearish connector corresponding to wave ((b)).

In this context, following the Elliott Wave theory and considering the third internal segment of the intraday rally, the price could produce a limited upside toward the supply zone bounded between 77.295 and 77.497. Finally, the bearish divergence on the MACD oscillator may mean a confirmation of the upward movement’s exhaustion corresponding to wave ((b)).

Short-Term Technical Outlook 

The incomplete bullish sequence of the AUDJPY cross unfolded in its 4-hour chart exposes the progress in its fourth wave of Subminuette degree labeled in green. Likewise, considering that the third wave is the extended wave of wave (c), the fifth wave in green should not be extended.

On the other hand, considering that the second wave in green is a simple correction, the fourth wave should elapse more time than the second wave. Additionally, the fifth wave in green could extend itself between 77.140 and 77.654. The price could find fresh sellers expecting to open their shorts on the bearish side of wave ((c)) of Minute degree labeled in black. The invalidation level of the bearish scenario locates at 78.462. 



By Eduardo Vargas

Eduardo Vargas is a technical analyst and independent trader based in Buenos Aires, Argentina. He is an Industrial Engineer and holds a Master in Finance degree. In 2008 began to trade Chilean stocks listed on IPSA. From 2013 started to trade CFDs on Forex, Commodities, Indices and ETFs markets. He analyses different markets combining the Elliott Wave analysis with Fibonacci tools. He provides a market mid-long-term vision.

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