Elliott Wave And Intermarket Analysis: 10 Year US Treasury Notes and AUDJPY

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Hi traders,

As you know, 10Y US treasury notes usually indicates the direction of XXX/JPY cross pairs, as it can be easily seen in these overlay charts with USDJPY and AUDJPY. Since 10Y US notes turned sharply down, we have seen a nice recovery on XXX/JPY crosses and if we expect more weakness on 10y US notes, then XXX/JPY crosses may stay under bullish pressure, but before a continuation, we may see a small corrective movement.

10 Year US Notes vs AUDJPY


10 Year US Notes vs USDJPY


AUDJPY can be trading in a bigger, complex correction since February of 2019, which we recognized it as a triangle pattern. A triangle is a five legged move, that can either be contracting or expanding. It is also a continuation pattern, that points into a new leg once it fully unfolds, that means into the direction of the trend (in our case this is to the upside). At the moment we see leg E) of a triangle unfolding, so be aware of a three-wave drop, towards the 78.0/77.96 area in upcoming days.

AUDJPY, 4h



Now switching to the 10 Year US Notes we can see price unfolding a three-wave retracement from the lows, which can look for resistance around the 124'0/124'16 region. At the mentioned region, various Fibonacci ratios (0.382/0.618) can react as reversal zones. That being said, AUDJPY and 10 Year US Notes are negatively correlated, so once 10 Year starts dropping, after a three-wave correction, that is when we would expect AUDJPY to find a support.

10 Year US Notes, 1h