Search ForexCrunch

Hello traders!

CADJPY is currently dropping from the 89.23 level, indicating that a bigger three-wave complex correction since March found a top at that upper channel line, and that bears are again in play. We labeled that drop from the high as wave 1), which found a base at the 84.34 level, which means in Elliott Wave theory a new temporary pullback as wave 2 may now follow. Wave 2) is a pullback and represents a pause within a trend and usually unfolds a simple zig-zag pattern. It is structured by three waves, A-B, and C, which can in our case look for resistance and a bearish reversal around the Fibonacci ratio of 50.0 and 61.8.

A decisive drop below the 84.34 low would confirm a completed wave 2) correction and more weakness.