AUDJPY's price action presents an intriguing pattern for Elliott Wave theorists. Following a complex corrective structure, we now see the potential development of a bearish impulse wave. The recent completion of what seems to be a corrective wave (4) at the 0.382 Fibonacci level of wave (3) sets the stage for the next move down.
The pair’s inability to sustain gains above this retracement level suggests that a wave (5) could lead to a decline, possibly extending to reach or exceed the length of wave (1). This aligns with the broader sentiment of risk-off moves favoring the Japanese Yen as a safe haven, particularly as market volatility persists.
For those considering a SHORT position, a strategic entry might be near the end of wave (4), with stop-losses carefully placed above the peak of wave (4) to manage risk. Targets could be set at the Fibonacci extensions of wave (1) to capitalize on the expected downward trajectory. Traders should monitor key levels closely, as the validity of this setup hinges on the adherence to the typical wave structure.