It is clear from all of the different classes that we are in the midst of a risk aversion move, Yen pairs Indices and the Dollar pairs are all moving lower which is the definition of a risk-off market. It is always important to stand back and look at the larger picture to make some decisions about how big this move may be, the CADJPY is a good leading instrument in this move as the CAD has been particularly weak exposed as it is to US trade sanctions and global trade dynamics.
I have the CAD in a long-term uptrend guided by the black trendline in the chart, at the moment I have the CADJPY in the second wave of a 5 wave move higher from the low of 18 March 2018 at 80.55, that low is under threat as this second wave is moving ever closer to its red invalidation line. If the red line is broken then the short-term bullish case will have failed and the overall picture for the CADJPY, and with it all Yen pairs and the closely correlated Indices, will turn short-term bearish.
That bearish move has implications because it will almost immediately put the Black long-term trendline under threat and the wave projection system I use will be calling for a break. That would lead to a far more serious deleveraging of risk assets which I find hard to accept at the moment and as a result I will be viewing the red 80.55 line as a floor for the current Risk aversion move.
I expect the level to hold and the CADJPY to be a lead indicator for the timing of a move in all of the Yen pairs and hence the more bullish indices.
Of course should the level break I will be taking a very different view.
I have the CAD in a long-term uptrend guided by the black trendline in the chart, at the moment I have the CADJPY in the second wave of a 5 wave move higher from the low of 18 March 2018 at 80.55, that low is under threat as this second wave is moving ever closer to its red invalidation line. If the red line is broken then the short-term bullish case will have failed and the overall picture for the CADJPY, and with it all Yen pairs and the closely correlated Indices, will turn short-term bearish.
That bearish move has implications because it will almost immediately put the Black long-term trendline under threat and the wave projection system I use will be calling for a break. That would lead to a far more serious deleveraging of risk assets which I find hard to accept at the moment and as a result I will be viewing the red 80.55 line as a floor for the current Risk aversion move.
I expect the level to hold and the CADJPY to be a lead indicator for the timing of a move in all of the Yen pairs and hence the more bullish indices.
Of course should the level break I will be taking a very different view.
