AUDJPY, daily tf, Elliott Wave corrective 4th wave

27 сент. 2020 г.

Hello my friends,

I hope everyone enjoy this week and make decent profit.
This weekend, i spent some time to analyze pairs for next week to trade.

My first trade for next week gonna be AUDJPY pairs.

I tried analyzing this pair by adding some fibonacci tools such as fibonacci expansion and retracement.
I found some interesting setup as this pair right now hitting strong support of EMA-200 at daily time frame. Insidentally the place where EMA-200 is located was also a horizontal support level and 161.8 fibonacci expansion level.
We could conclude that 73.90-74.10 area is an area of confluences. For AUDJPY to drop further, they will need a lot of strenght.
In my opinion, bears currently exhausted as AUDJPY has dropped for 10 straight candles / 2 weeks. It is bound to retrace a bit before continue to the downside.

Using Elliott Waves theory as the basis, we could say that we're going to see corrective wave which is Wave-4.
Wave-3 stopped exactly at 161.8 fibonacci expansion.

Wave-4 usually only a quick corrective wave so we will only buy this pair for a short time. It usually end at 23.6-50% fibonacci retracement. Usually it only stopped at 23.6-38.2% retracement so we will only aim between this fibonacci ratio.

I am planning to buy AUDJPY at 74.10 when market open next week. Stop loss will be located a few pips below the support. There are going to be 2setups and you can choose which to follow.

Buy AUDJPY 74.10
Stop loss 73.80
Take profit for 1st setup is at 74.85 (RR ratio is 1 : 2.5)
Take profit for 2nd setup is at 75.40 (RR ratio is 1 : 4.33)

If you wanna take profit using the 2nd setup it is wiser to use trailing stop when price pass the 75.00 level.

Use only 1-2% risk
Good Luck