✈️ CAD/JPY Close to Confirm Bearish Wave 5 ✈️

3 min read
Adarwish

adarwish

Author

Hi traders,

CAD/JPY developed a bullish momentum during the last 3 weeks… It seems that this bullish momentum is part of a potential wave 4 correction and we are now looking for the end of wave 4 and the start of wave 5.

We will review different scenarios as the pair can either bounce for a downtrend or expand the bullish momentum within wave 4.

This article will discuss the wave perceptive and expected scenarios for the pair during the coming days using wave pattern, support, and resistance and SWAT software.

CAD/JPY Bounce From Fibonacci 50%

As seen in the below chart, the pair had a strong downtrend by offering 3 bearish waves, which was then followed by a bullish momentum. In my view, this is probably part of wave 4 and now the pair can either bounce for a downtrend and start wave 5 or expand the bullish momentum within wave 4… Here are the main conclusions:

  1. CAD/JPY is retracing into the Fibonacci levels which could act as resistance.
  2. Typical Fib Count of Wave 4 is 38.2 %, 50 and sometimes 61.8% of wave 3.
  3. So in this case the 61.8% Fibonacci is above the bottom of wave 1 so such a retracement would invalidate the wave 4 pattern.

So I expect that the pair has an appointment with the bearish momentum of wave 5 but we still need more confirmation before trading this pair… in the next paragraph we will discuss this development by using SWAT software.

CAD/JPY SWAT CHART

Now its time to use the SWAT 4-hour chart to determine the entry points according to the expected wave patterns… SWAT Chart indicates a bullish momentum and needs some developments to confirm the bearish wave 5 starts…  Here are the main developments to consider:

  1. Need a strong bearish candle to break the 21 EMA.
  2. 21EMA break will be our short setup entry to test the 144 EMA.
  3. I advise traders always to protect their profit or use trailing stops.

So in my view, traders should wait for the confirmation before trading this pair and look for sell opportunity only as it matches the expected wave pattern.

Good trading,

Ahmed
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