$AUDJPY Long and mid term analysis. Expect some crash.

I was avoiding to trade cross JPY since this blog started because I could not conclude my Elliott wave count with confidence. It may have been reflection of the uncertainty of the Japanese politics and economy. The value of JPY has been rather passively determined by the world economy in my view.

I have not been busy trading these days, so I took a moment to broaden my view to the cross currency other than my regular EURUSD and AUDUSD. The analysis of today is AUDJPY.

The first chart is the weekly. From the lowest in the fall of 2008 (blue underlined a), AUDJPY rebounded pretty well except that its rally may be fading now. From the blue underlined a, we can count 5 waves up (impulse) to purple .a, then some irregular flat to purple .b, then 5 waves of expanding triangle (a-b-c-d-e) to purple .c to conclude Wave blue underlined b.

What the Elliott wave is telling me is the next move may be 5 waves down towards the spring of the year 2011 that may reach to 35.00! I myself cannot believe if it happens. 35.00 may be too dramatic, but I am expecting a crash of some degree in the cross currency.

The next is the daily chart. It looks like some people started to play safe after Goldman Sach’s news came in. This could be the end of black e as I showed in the chart, and I will consider trading short AUDJPY if the price crosses the red line. But I would be careful at least until the price goes below the gray line extended from black b and d.

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