CHFJPY Trade opportunity (2 week trade setuHi everyone, I am exhausted. I have been up until 5am these past couple nights charting, and letting out blog posts, so it is nice to be able to post a bit earlier and get a good night of sleep. Anyway, let's get into the trade setup.-
The pair we are looking at today is CHFJPY. What initially intrigued me about this pair, was the elliott wave structure on the 15 minute.
Elliott wave analysis: As you can see from my chart, we have appeared to have just finished a wave 2, meaning that we have the opportunity to catch what the strongest part of this wave. By the time you are reading this, we have most likely missed the chance to catch the wave A, or the wave B, so use this time to position yourself for the wave C. At the moment, wave B hasn't yet unfolded, so I recommend proceeding with extreme caution. I would not recommend trying to catch the low of the wave B, since they tend to be extremely confusing when they unfold. My estimate for the wave B, is that it will hit somewhere around 114.9. This area is the top of the previous base channel, which is a strong support, and it is also the wave 4 of the previous wave A, meaning that there is lots of support here. And there happens to be around where the 55 ema on the 15 minute is. There is no guarantee that this will unfold in the wave count provided, so proceed with caution. Ideally some confirmation that wave c is starting would be nice. So if we bounce off of the support and hit past the previous high, I would see this as enough confirmation to get in.
The target for this trade is 115.698, and I would see a break past the 200 ema on the 15 minute as a sign to get out of the trade.
Moving average analysis: On the 15 minute, we have fanned out quite a bit, and this justifies the pullback for the wave B, and then a greater jump to higher highs in the future.
On the on hour, we have seen a golden cross, meaning that the longer term outlook for this pair is bullish, and in turn, this means that the chance this is a wave 3 move is quite likely.
MACD analysis: On the 15 minute time frame we have crossed and are headed down, which is exactly what I would expect for this chart. I could see a small cross into the negative side or maybe even a touch of the zero line and a reversal back up to the target. It all depends on where wave B will end.
RSI Analysis: The rsi on the 15 minute also confirms the count I have outlined.
As visible from my chart, we seem to be bearishly diverging on the short term, which again supports the idea that we are headed down for a wave B and then back up for a wave C. The reason why I don't think we are headed very far down, is because we seem to have crossed into the overbought territory, but not so much to make me think that we are completely out of steam. I see that this move on the rsi, is a sign that we are going to make a small stop down before we head back up. In addition to this, on the one hour time frame, we have repeatedly tested the resistance to break into the overbought territory, and this makes me believe that we are about to break through it after a small wave B down, and when we break through, we will begin our ascent to the target.
All in all, I hope that you guys have found my analysis very helpful in pointing out what is happening. Right now this is all speculation, so I wouldn't start jumping in, but instead I would wait until what I have said starts actually happening. As it starts to happen, I would recommend buying in. I wish you the best of luck in the last 2 trading days of the market, and as always check out my twitter to receive instant notification of when I see another trade setup.
Also, a little reminder to everyone and myself included, it is important to count the waves as they appear. Even if they don't create the prettiest of counts, the price action never is wrong, and I find if you try and fit the price action into a symmetrical and aesthetically pleasing count, you aren't actually able to predict much of the future, you are just organizing what has passed. So i hope this has been helpful for everyone, and enjoy your night.
