GBP/JPY Trade Idea

GBP/JPY has broken back up through the strong resistance/support level at around 140 and is looking bullish on the smaller time frames. To the left you can see my daily count and below is a zoomed in 4 hour chart of recent price action. The fourth wave extreme of the move from 150.72 coincides perfectly with the 61.8% Fibonacci of the drop at 143.60. This gives extra weighting to the 143.50/70 zone and I expect that if price retraces back up to that level, it will provide extremely strong resistance and likely be the turning point for the pair. I will be looking to short from 143.50, and keeping my stop at 145.50.

USD/CAD Trade Idea

Here is a 4 Hour Chart of the USD/CAD pair. As you can see price bounced off the 38.2% Fibonacci in what looks to be a consolidatory fourth wave. The EW guideline of alternation fits perfectly with this count, with wave 2 being short and sharp and retracing greater than 61.8% of wave 1, and wave 4 being slower and flatter having only retraced around 38.2% of wave 3.

Below is a 30 minute chart showing a possible count for the correction and the Fibonacci levels where I will be looking to short from. 1.025 is the spot where I will be placing my sell order, and I'll be keeping my stops at 1.031. The more conservative investor may prefer to put their stop at the wave 1 low around 1.038. If price moves beyond this level this count will be invalidated.

GBP/JPY Nearing Daily Resistance

Keep an eye on this one. GBP/JPY has broken a very important support line and is back testing the bottom of it. I expect price will not retrace much above 1.40 if at all and then expect some decent follow through to the downside.

AUD/JPY Trade Idea

While my CAD/JPY count was invalidated by a break above the January high, my AUD/JPY is still very much possible. Here is my 4 hour chart. As you can see a final 5th wave is needed to complete the impulse from 81.72. I expect this final wave will complete at around 85.20, which is where wave 1 is equal to wave 5 (shown below), however if it pushes beyond there it will encounter a significant resistance zone where several major highs have formed in the past. This move is beginning to look tired, as you can see in the chart, the A leg of 2 was much sharper than the C leg has been so far. RSI divergence also warns of impending downside.

Here is a close up hourly of the C leg of green wave 2 so far. As you can see the final 5 does not yet look complete. Expect a push above 85 to complete this move. I will be looking to short from 85.10 with a stop above the recent high at 86.20.

EUR/JPY Hourly

After watching Jamie's video just now I've decided to take a EUR/JPY short position. To the left is an hourly chart of the pair. The risk to reward ratio on this trade is very good, as a stop can be placed at the wave 1 low at 123.22 about 50 pips away from the current price level. The Elliott Channel also corresponds well with the Fibonacci ratios of waves 1 and 5, so my target will be just below 120, at around the same level as the 161.8% Fib of wave 1.

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.

USD/JPY 4 Hour Update

Here is a 4 Hour Chart of my USD/JPY count. I think there will likely be one more push higher to complete an Ending Diagonal c of B of the triple 3 correction before a final C leg begins. As I have mentioned in previous postings, expect resistance from the downward sloping trend line off the two recent highs. 91.60 is also the 61.8% Fib of the entire consolidative drop from 93.77.

USD/JPY Facing Strong Resistance at 91.30

The USD/JPY is coming up to a very strong resistance area around 91.30. This area has provided solid resistance in the past (3/2) and is also near the downward sloping trend line drawn off the two highs from 7/1 and 19/2. A double zig-zag  from 88.14 appears to be forming, and C of the second zig-zag will equal A at 91.36. I think a short from this area makes a reasonably safe trade. I will be  looking to short from 91.30 and keeping my stop at 92.2.

GBP/USD Update

Here is an updated GBP/USD chart. I think the pair is forming an Ending Diagonal C wave to complete this correction. I got out of my short from 1.5075 at break even and will look to re-enter higher at around 1.5105.