It was November 11th, when we published “AUD/JPY To Regain Intraday Positive Bias?”. In that article the Elliott Wave Principle helped us come to the conclusion we should expect a significant recovery in AUD/JPY. The next chart shows how the forecast looked like 11 days ago.
This chart was all we needed to form our bullish opinion. The pattern we recognized was the common 5-3 wave cycle – a five-wave impulse to the upside, followed by an A-B-C correction with a triangle in wave B. According to the theory, the trend was supposed to resume in the direction of the impulsive sequence. The chart below shows how the situation developed.
As visible, AUD/JPY not only reached the first target of 88.00, but exceeded it by another 100 pips to the north. All thanks to Ralph Nelson Elliott and his Wave Principle.
Now, the whole recovery from 85.42 appears to be a larger (A)-(B)-(C) zig-zag, where wave (B) is a triangle once again. If this is correct, wave (C) still has room to grow in waves 3, 4 and 5 to the north. 89.50 is very likely, but traders should be careful, because once wave (C) is over, a bearish reversal should occur.