Sample Category Title

Hello fellow traders,

As our members know we have had many profitable trading setups recently. In this technical article, we are going to present another Elliott Wave trading setup we got in CADJPY. The forex pair completed this correction precisely at the Equal Legs zone, referred to as the Blue Box Area. In the following sections, we will delve into the specifics of the Elliott Wave pattern observed , discuss the trading setup.

CADJPY Elliott Wave 1 Hour Chart 12.15.2025

The current view suggests that CADJPY is forming a 3 waves correction in wave (iv) blue . The price action shows an incomplete structure from the peak. We anticipate an extension toward the extreme zone at 112.497-111.910, marked as a Blue Box. At that zone we are looking to re-enter as buyers.

We recommend members to avoid selling the pair. As the main trend remains bullish, we anticipate at least a 3-wave bounce from this Blue Box area. Once the price touches the 50 fibs against the b red connector, we’ll make positions risk-free and set the stop loss at breakeven and book partial profits. On other hand, breaking below the 1.618 Fibonacci extension level at 111.91 would invalidate the trade.

Official trading strategy on How to trade 3, 7, or 11 swing and equal leg is explained in details in Educational Video, available for members viewing inside the membership area.

Quick reminder on how to trade our charts :

Red bearish stamp+ blue box = Selling Setup
Green bullish stamp+ blue box = Buying Setup
Charts with Black stamps are not tradable. 🚫

CADJPY Elliott Wave 1 Hour Chart 12.19.2025

CADJPY has made extension down toward Blue Box (112.497-111.910) and found buyers as expected. The pair made strong rally from the Buying Zone, reaching new highs. Consequently, any long positions from the Blue Box should now be risk-free. We’ve set our stop loss at breakeven and have already secured partial profits. We count correction completed at 112.245 low.

Key Highlights

• EUR/USD started a downside correction from the 1.1800 zone.
• A key bullish trend line is forming with support at 1.1700 on the 4-hour chart.
• GBP/USD is currently consolidating gains above 1.3320.
• Gold could continue to gain bullish momentum if it settles above $4,380.

EUR/USD Technical Analysis

The Euro failed to clear the 1.1800 barrier against the US Dollar. EUR/USD corrected some gains and traded below 1.1750.

Looking at the 4-hour chart, the pair settled above the 200 simple moving average (green, 4-hour) and the 100 simple moving average (red, 4-hour). A high was formed at 1.1804 before there was a pullback. The pair dipped and tested the 50% Fib retracement level of the upward move from the 1.1615 swing low to the 1.1804 high.

On the downside, there is key support at 1.1700. There is also a bullish trend line forming with support at 1.1700. A downside break below the trend line might spark bearish moves.

The first major support is 1.1655 and the 76.4% Fib retracement level of the upward move from the 1.1615 swing low to the 1.1804 high. The next support could be 1.1615 and the 200 simple moving average (green, 4-hour), below which the bears might aim for a move toward 1.1550.

Immediate resistance sits near 1.1750. The first key hurdle is seen near 1.1760. A close above 1.1760 could open the doors for a move toward 1.1800. Any more gains could set the pace for a steady increase toward 1.1850.

Looking at Gold, the bulls remain in action and might soon aim for a move above the $4,400 level in the near term.

Upcoming Key Economic Events:

• Chicago Fed National Activity Index for Sep 2025 – Forecast -0.10, versus -0.12 previous.

A busy week of economic data and central bank decisions gave traders a clearer view of market conditions. The main highlight was stronger-than-expected U.S. employment data, with employers adding 64,000 jobs in November, beating forecasts and showing a clear improvement from October. U.S. CPI inflation data also came in lower than expected, supporting the view that inflation is easing.

Central bank decisions were mostly as expected. The ECB kept interest rates unchanged, the Bank of England cut rates, and the Bank of Japan raised interest rates. However, the BOJ’s statement suggested a slower pace of rate hikes next year, which led to a sharp rise in USD/JPY.

During the week, equity markets in both the U.S. and Japan moved lower as concerns over high AI-related valuations continued. Investor profit-taking after a strong year for equities also added pressure. In contrast, gold continued to rise, moving higher toward record levels as investors looked for safety amid changing rate expectations.

Markets This Week

U.S. Stocks

The Dow index ended the week lower as investors took profits after a strong rise in 2025, while concerns over the valuations of AI-related companies continued to weigh on sentiment. With markets expected to be quieter, further profit-taking remains a risk, making selling into strength the preferred approach in the near term. Resistance is seen at 48,500 and 49,000, while support is located at 48,000, 47,500, 47,000, 46,500, and 46,000.

Japanese Stocks

Japanese stocks moved lower alongside U.S. markets for most of the week, before rebounding after the Bank of Japan meeting. Markets scaled back expectations for further Japanese rate hikes, which led to a sharp weakening of the yen and supported the Nikkei. Looking ahead, volatility may increase with Japanese markets open all week and the risk of possible Bank of Japan intervention. Given the risk of a quick pullback, the focus remains on selling opportunities. Key levels remain unchanged, with resistance at 51,000円, 51,500円, and 52,000円, and support at 49,000円, 48,000円, and 47,000円.

USD/JPY

Ahead of the expected Bank of Japan rate hike, USD/JPY moved lower and found support near the early-month lows, but while the hike itself was widely priced in, the BOJ’s statement surprised markets and led traders to reduce expectations for further rate rises in 2026, triggering a sharp rebound back toward the highs of the year. Looking ahead, USD/JPY remains a key focus, with the risk of Bank of Japan yen-buying intervention in thin markets if weakness continues; the pair is overbought in the short term, raising the risk of a pullback, although a break above the yearly highs could see a quick extension higher before any sharp reversal. Resistance is at 158, 159, and 160, while support is at 156, 155, and 154.5.

Gold

Gold continued its strong uptrend last week, returning to record highs. With momentum still firm, thin market conditions could allow prices to push sharply above recent highs. The focus remains on buying opportunities as long as gold holds above the 10-day moving average. Resistance is seen at $4,350, $4,380, $4,400, and $4,500, while support is located at $4,300, $4,250 and $4,200.

Crude Oil

The recent downtrend in crude oil continued as the market remained focused on oversupply concerns and weakening demand. While the 2025 lows were tested and held for now, the broader downtrend remains strong, keeping the focus on selling opportunities. Resistance is seen at $60, $65, $66.50, $70, and $75, while support remains at $55 and $50.

Bitcoin

Bitcoin saw a quiet week of range trading as activity slowed toward the end of the year. While holiday conditions could still allow for a surprise move, range trading between $85,000 and $95,000 remains the preferred short-term strategy. Resistance is at $95,000 and $100,000, while support is at $85,000, $80,000, and $75,000.

This Week’s Focus

Monday: U.K. GDP

• Tuesday: Japan BoJ Core CPI, U.S. Durable Goods, GDP, Industrial Production and Consumer Confidence
• Wednesday: Japan Monetary Policy Meeting Minutes
• Thursday: Japan BoJ Governor Ueda speech, Christmas Day
• Friday: Japan Tokyo Core CPI and Industrial Production

This is a shortened trading week, with most major markets closed on Thursday and Friday for the Christmas holiday. There is still some important U.S. data due, which could create volatility, and after the sharp weakening of the yen last week, there is also potential for Bank of Japan intervention if the move extends further. While trading conditions are likely to be quiet, reduced liquidity means there is always the risk of sudden, large market moves.

Nikkei 225: ⬆️ Buy

• Nikkei 225 reversed from support area
• Likely to rise to resistance level 51150.00

Nikkei 225 index recently reversed from the support area between the pivotal support level 48500.00 (which has been reversing the price from November) and the lower daily Bollinger Band.

The support level 48500.00 was strengthened by the 50% Fibonacci correction level of the previous sharp upward impulse from September.

Given the clear daily uptrend, Nikkei 225 index can be expected to rise to the next resistance level 51150.00 (which stopped earlier waves B and 1).

Ethereum: ⬆️ Buy

• Ethereum reversed from support area
• Likely to rise to resistance level 3200.00

Ethereum cryptocurrency recently reversed from the support area between the strong support level 2800.00 (former resistance from June, which has been reversing the price from November) and the lower daily Bollinger Band.

The upward reversal from this from the support area will likely form the daily Japanese candlesticks reversal pattern Morning Star – strong buy signal for Ethereum.

Given the strength of the support level 2800.00 and the oversold daily Stochastic, Ethereum cryptocurrency can be expected to rise to the next resistance level 3200.00.

The past week delivered no shortage of surprises, yet markets ended it with remarkably little conviction. Key macro data and central bank decisions challenged prevailing assumptions, but follow-through across major assets proved elusive.

US economic releases hinted at a faster cooling in both employment and inflation. Under normal circumstances, that combination would have fueled enthusiasm for deeper policy easing from the Fed. Instead, markets paused, choosing caution over commitment.

The result was indecision across major asset classes. Equity benchmarks failed to break free from recent ranges, bond yields wobbled without direction, and Dollar drifted rather than trended. The sense was not disbelief—but doubt.

Elsewhere, Sterling narrowly avoided what had looked like an inevitable slide. A surprisingly hawkish rate cut from the BoE shifted the tone just enough to halt bearish momentum, forcing markets to reconsider how far UK easing can realistically go. Yen told the opposite story. The BoJ finally delivered a long-awaited rate hike, yet the currency continued to weaken.

At the end, Yen was the worst performer of the week, followed by Kiwi and then Aussie. Swiss Franc was the best, followed by Sterling and then Dollar. Euro and Loonie ended in the middle.

Blurred Signals from Jobs and CPI Keep Fed Bets Contained

Markets looked to the delayed US labor and inflation data for direction. Instead of resolving uncertainty, the releases reinforced it, leaving investors hesitant to push either risk assets or Fed expectations decisively.

October’s payrolls collapse immediately caught attention, with -105k decline marking the weakest print since the pandemic era. Yet the bulk of that fall stemmed from federal employment, distorted by the delayed exit of workers who had previously accepted voluntary separation offers. Adjusted for that factor, labor market momentum remains weak but far from broken. November’s payroll gain of 64k, slightly above forecasts, suggested some rebound as government operations normalized and trade tensions eased under the one-year US–China tariff truce.

The inflation side of the story was equally inconclusive. November CPI undershot expectations, but the absence of October data due to the government shutdown undermined confidence in the result. Key components were missing, reducing the reliability of the headline slowdown. That concern was echoed by New York Fed President John Williams, who warned that technical distortions likely pushed CPI lower. He estimated the impact at roughly a tenth of a percentage point and urged caution until December figures are available.

With both jobs and inflation signals blurred, Fed expectations barely shifted. A January hold remains the base case, while the probability of a March cut nudged up only marginally to around 54%—still little more than a coin toss. Importantly, there are still three full rounds of employment and inflation data before the March FOMC meeting. That makes any firm conclusion on the next policy move premature, and markets appear keenly aware of that constraint.

Technically, after initial dip, S&P 500 drew notable support from 55 D EMA (now at 6,740.93) and recovered. Yet, upside is limited below 6,920.34 high. Hence, more consolidations could still be seen with risk of another dip towards 6,521.92 support.

Firm break of this support will target deeper correction to 38.2% retracement of 4,835.04 to 6,920.34 at 6,123.75. Meanwhile, in case of stronger rise, the focus will be on whether S&P 500 could sustain above 7,000 psychological level.

Rates and Dollar Mirror Market Hesitation

The uncertainty surrounding US macro signals was clearly reflected in both Treasury yields and the Dollar. Neither market showed the conviction needed to confirm a new trend.

Technically, 10-year yield failed to break through 4.2000 key cluster resistance (38.2% retracement of 4.628 to 3.947 at 4.207) and gyrated lower. However, some support was seen from flat 55 D EMA (now at 4.117).

On the downside, sustained break of 55 D EMA will confirm rejection by 4.200. More importantly, that would keep near term outlook bearish and affirm that recent rebound from 3.947 was merely a correction to the fall from 4.628. Deeper decline would then be seen back to retest 3.947.

However, decisive break of 4.2 will argue that fall from 4.629 has already completed, and further rise should be seen to 61.8% retracement at 4.368 and possibly above.

Dollar Index also gyrated lower last week but failed to sustain below 98.03 support. The break of flat 55 D EMA (now at 98.95) is a near term bearish sign. Yet, firm break of 98.03 is still needed to confirm that rebound from 96.21 has completed as correction at 100.39.

However, strong bounce from current level and sustained trading above 55 D EMA will bring another rise to 100.39 resistance and possibly further to 38.2% retracement of 110.17 to 96.21 at 101.54.

Hawkish BoE Surprise Rescues Sterling

Sterling spent the early part of last week on the defensive, with markets positioned for a dovish rate cut and a continuation of the easing narrative. Softer employment data and sharper-than-expected slowdown in inflation appeared to leave little room for resistance within the MPC.

Instead, the BoE delivered a cut that was hawkish in its details. While Bank Rate was lowered by 25bps to 3.75% as expected, the 5–4 vote split came as a clear surprise, immediately forcing markets to reassess the pace of easing ahead.

Four MPC members voted to hold rates unchanged, signaling deep unease about declaring victory over inflation. Despite the recent disinflation, concerns over services prices, wage dynamics, and inflation expectations remain entrenched among the more hawkish bloc.

Crucially, the BoE acknowledged that further easing decisions would now become a “closer call.” That explicit language marked a shift away from the assumption of an automatic quarterly cutting cycle, injecting uncertainty into the outlook for 2026.

Governor Andrew Bailey reinforced that message after the meeting, noting that while rates are likely to come down over time, the pace of cuts will ease at some point. He stressed that judging exactly when remains highly uncertain.

Markets still see February as the most logical timing for the next cut, given the availability of new economic projections. Even so, conviction has faded, with some analysts now shifting expectations toward March or even later.

From a market perspective, that was enough to stabilize Sterling. Technically, risks stay on the downside for EUR/GBP as last week's recovery was limited below 0.8800 resistance. Next target will likely bring sustained trading below 55 D EMA (now at 0.8479), and pave the way to 0.8631 cluster support (38.2% retracement of 0.8221 to 0.8663 at 0.8618).

BoJ Tightening Ceiling and Fiscal Reality Combine to Weigh on Yen

The BoJ’s long-awaited rate hike to 0.75% marked an important symbolic step, but it did little to alter the Yen’s broader down trend. Instead of finding support, the currency weakened further as markets looked past the headline move and reassessed what comes next.

From a policy perspective, expectations for further tightening remain restrained. While the BoJ has retained tightening bias, guidance has been deliberately vague. Market consensus now points to the next hike only around mid-2026. Even then, rates are expected to rise merely to around 1.00%, placing policy just at the lower bound of the estimated 1.00–2.50% neutral range. Some investors are already questioning whether 1.00% could mark the terminal rate of the current cycle. Without clarity on a path deeper into neutral, expectations for sustained Yen appreciation remain muted.

Running alongside these policy limits are growing fiscal concerns. Prime Minister Sanae Takaichi's large-scale fiscal stimulus is expected to be debt financed. With Japan’s debt-to-GDP ratio already above 230%, markets assume the BoJ will remain under pressure to keep long-term borrowing costs contained. Allowing long-term yields to rise meaningfully would risk destabilizing public finances. This alone is a main driving force behind Yen's current depreciation cycle.

CHF/JPY was among the top movers last week, gaining 1.24%. Technically, CHF/PY has surged through 100% projection of 173.06 to 186.02 from 183.95 at 196.91. Near term outlook will stay bullish as long as 194.22 support holds. Next target is 138.2% projection at 201.86. But there is risk of more upside reacceleration to 161.8% projection at 204.91 before topping.

EUR/USD Weekly Outlook

EUR/USD edge higher to 1.1803 last week but retreated. Initial bias remains neutral this week first. On the upside, break of 1.1803 will extend the rally from 1.1467 to retest 1.1917 high. However, firm break of 55 D EMA (now at 1.1640) will turn bias back to the downside for 1.1467 support, to extend the corrective pattern form 1.19717 with another falling leg.

In the bigger picture, as long as 55 W EMA (now at 1.1360) holds, up trend from 0.9534 (2022 low) is still in favor to continue. Decisive break of 1.2 key psychological level will carry larger bullish implication. However, sustained trading below 55 W EMA will argue that rise from 0.9534 has completed as a three wave corrective bounce, and keep long term outlook bearish.

In the long term picture, 38.2% retracement of 1.6039 to 0.9534 at 1.2019, which is close to 1.2000 psychological level is the key for the outlook. Rejection by this level will keep the multi decade down trend from 1.6039 (2008 high) intact, and keep outlook neutral at best. However, decisive break of 1.2000/19, will suggest long term bullish trend reversal, and target 61.8% retracement at 1.3554.

EUR/USD edge higher to 1.1803 last week but retreated. Initial bias remains neutral this week first. On the upside, break of 1.1803 will extend the rally from 1.1467 to retest 1.1917 high. However, firm break of 55 D EMA (now at 1.1640) will turn bias back to the downside for 1.1467 support, to extend the corrective pattern form 1.19717 with another falling leg.

In the bigger picture, as long as 55 W EMA (now at 1.1360) holds, up trend from 0.9534 (2022 low) is still in favor to continue. Decisive break of 1.2 key psychological level will carry larger bullish implication. However, sustained trading below 55 W EMA will argue that rise from 0.9534 has completed as a three wave corrective bounce, and keep long term outlook bearish.

In the long term picture, 38.2% retracement of 1.6039 to 0.9534 at 1.2019, which is close to 1.2000 psychological level is the key for the outlook. Rejection by this level will keep the multi decade down trend from 1.6039 (2008 high) intact, and keep outlook neutral at best. However, decisive break of 1.2000/19, will suggest long term bullish trend reversal, and target 61.8% retracement at 1.3554.

USD/JPY's strong rally last week suggests that consolidation from 157.88 has completed and rise from 139.87 is resuming. Initial bias stays on the upside this week. Decisive break of 158.85 key structural resistance will be a strong medium term bullish sign, and bring retest of 161.94 high. For now, outlook will stay bullish as long as 154.38 support holds, in case of retreat.

In the bigger picture, corrective pattern from 161.94 (2024 high) could have completed with three waves at 139.87. Larger up trend from 102.58 (2021 low) could be ready to resume through 161.94. Decisive break of 158.85 structural resistance will solidify this bullish case and target 161.94 for confirmation. On the downside, break of 150.90 resistance turned support will dampen this bullish view and extend the corrective range pattern with another falling leg.

In the long term picture, up trend from 75.56 (2011 low) is still in progress and might be ready to resumption. Firm break of 161.94 will target 61.8% projection of 102.58 (2020 low) to 161.94 (2024 high) from 139.87 at 176.55 in the medium term.

GBP/USD edged higher to 1.3455 last week but quickly retreated. Initial bias remains neutral this week first, On the upside, above 1.3455 will resume the rebound from 1.3008. Firm break of 1.3470 resistance will pave the way to retest 1.3787 high. However, sustained break of 55 D EMA (now at 1.3301) will argue that the rebound has completed. Deeper fall would be seen back to 1.3008 support to resume the whole corrective pattern from 1.3787 high.

In the bigger picture, current development suggests that fall from 1.3787 is merely a corrective move, and larger rise from 1.0351 (2022 low) is still in progress. Firm break of 1.3787 will target 1.4248 (2021 high) key structural resistance. This will remain the favored case as long as target 38.2% retracement of 1.0351 to 1.3787 at 1.2474 holds, in case of another fall.

In the long term picture, as long as 1.4248/4480 resistance zone holds (38.2% retracement of 2.1161 to 1.0351 at 1.4480), the long term outlook will remain bearish. That is, price actions from 1.3051 are seen as a corrective pattern to down trend from 2.1161 (2007 high) only. Nevertheless, decisive break of 1.4248/4480 will be a strong sign of long term bullish reversal.