CAD/JPY Daily Update

There don't seem to be many obvious trades for me to discuss at the moment. The sharp drop from the top in many pairs hasn't had the immediate follow through I would expect if this were the beginning of a new panic driven cycle. While I am still bearish on equities and commodities, it is possible there will be one more push higher before a turn. Here is my daily CAD/JPY chart, which points to one last push up before panic and fear retake the markets and prices plummet. If price does continue to fall and 88.458 is breached, than my count is off and it will signal that the top is likely in.

AUD/JPY Refresh

Here is a total rehash of my AUD/JPY count. The double top has been broken putting an end to my hopes of the massive H&S possibility that could have been forming. The 61.8% Fibonacci of the entire move down has also given way, and recent price action is looking very bullish. I am now no longer bearish on this pair, while I still expect a pullback soon - Daily RSI is well overbought - my longer term preferred expectation is not to the upside. The CAD/JPY chart looks almost identical. I am not currently trading this pair. I will keep you posted if I see any opportunities in it arising.

CAD/JPY Update

Here is a 4 Hour Chart of the CAD/JPY pair, which I have been watching closely for some time now. In my opinion there have been very few obvious trades over the past few weeks, as price has been very volatile in some markets (EUR/USD for example) and very sluggish in others. I have adjusted my C wave count slightly as you can see in the chart, to better fit with recent price action. Obviously the ED I was following has not completed yet as we have not yet had a sharp fall to the downside. This adjusted count sits much better with Fib ratios than my previous expanding ED one, with waves 1 and 3 being almost exactly equal in length, and wave 5 expected to be around 61.8% of the size of both of the aforementioned.

Here is a 15 minute close-up of the contracting ending diagonal which I now think is nearing completion. Canada's CPI figures come out in the coming US Session which I think will be the perfect catalyst for a sharp fall from current levels and the beginning of a large wave 3 down for the pair. Following are a few more indicators suggesting this pair is about to fall sharply.

Here is a daily chart of CAD/JPY shown with the ATR (Average True Range). As you can see the ATR has fallen to almost as low as the levels of late 2008, just before the massive surge in the price of the pair. This tells us that increasing volatility is likely in the near future.

Here is an hourly chart of the pair, showing multiple divergences in RSI (Relative Strength Index) where CAD/JPY made a new high but the RSI did not. This is just an example of the divergence we are seeing across the board. There are many more examples of divergence across all time frames, which all point to a nearing top forming in the pair.

Another reason I favour this trade so highly is the incredible Risk to Reward ratio it offers. Stops should be placed just above the double top at 90.60 and the minimum target for this trade is 83.2. I suggest placing a short order at 89.70 or if you're going to be watching the markets when CPI figures are released wait for a spike high over-throw of the ED before taking a short position. Good luck!

CAD/JPY Trade Idea

Here is a CAD/JPY hourly chart showing what appears to be a 5 wave 'C' rally from the low. Recent price action seems to be in a series of 3 waves movements, and in an expanding diagonal formation, which is quite rare. If this count is correct, price cannot exceed 89.95 however conservative traders may wish to place their stops above the yearly high at 90.62. I have drawn in the Fibonacci levels for wave 3 and projected them onto wave 5 for you to see. As wave 1 is longer than wave 3 wave 5 must be shorter as wave 3 can never be the shortest wave.

Here is a 15 minute close up of the expanding ending diagonal. As you can see we are very close to critical levels for the pair. I will be looking to short at 89.75 with a long term hold target well below 82.

CAD/JPY Charts

The CAD/JPY 4 Hour Chart looks almost identical to the AUD/JPY that I posted a few days ago. An impulse up looks to be nearing completion in a C wave. I expect another high before we break sharply lower. RSI is divergent across all time frames, however wave count suggests this move up is not yet complete. As the move from 86.95-88.73 looks to be in 3 waves, there are two scenarios I think are most likely. Below are 15 minute examples of these.

Above is my favoured count. It is possible that CAD/JPY (and likely AUD/JPY also) is forming and Ending Diagonal, in which price will move up and down jaggedly until a top forms, probably around 89.60.

Below is another possibility. Due the the 3 wave nature of the move from 86.95, it is possible that wave 4 is not yet finished, and a 5 wave move down to complete the wave is needed before further upside action occurs. If this is correct, I expect wave 5 to complete just above 89.