AUDJPY Elliott Wave: Strategic Entry Points in the Blue Box Correction

The AUDJPY cross has emerged as a focal point for technical traders in late 2025, with its price action reflecting a complex interplay of Elliott Wave dynamics and Fibonacci retracement levels. According to a report by FX Street, the pair is currently navigating a Zigzag correction following a 5-wave impulsive cycle from the 96.23 low, with wave ((b)) recently completing within the 50%–61.8% Fibonacci retracement zone (100.017–100.293). This correction, part of a larger double three pattern, suggests a potential resumption of the downtrend within wave ((c)), targeting 97.97–97.48. For traders, the Blue Box Correction setup offers a structured approach to identify high-probability entry points while managing risk effectively.

Elliott Wave Structure and the Blue Box Framework

The Elliott Wave analysis of AUDJPY reveals a clear sequence of corrective patterns. As of November 2025, the pair has formed a 3-wave pullback from the 101.521 low, with the Blue Box zone defined between 102.824 and 102.072. This zone acts as a critical area for traders to consider long positions, as it aligns with the 50% Fibonacci retracement level, which historically has served as a confluence point for trend continuation according to technical analysis. A bullish bias is reinforced by the price structure, which has shown buyers stepping in around 102.20–102.00, a level that could act as a support for a rebound toward 104.00 as observed on TradingView.

The double three pattern, identified by Elliott Wave Forecast, further validates the strategic importance of the Blue Box. This corrective structure, which includes two distinct three-wave patterns separated by a connecting wave, has historically led to breakouts toward new highs. For instance, on October 15, 2025, the pair found buyers at the equal legs zone (96.268–95.509), propelling it toward fresh highs. Such patterns provide traders with well-defined entry points and invalidation levels, reducing ambiguity in trade execution.

Technical Timing and Confluence Levels

Price action data from the past month underscores the significance of Fibonacci retracement levels in timing entries. The 50% level at 102.20 has acted as a magnet for buyers, with the RSI and MACD indicators showing neutral to bullish tendencies as indicated on TradingView. This confluence of technical factors-Fibonacci levels, price structure, and momentum indicators-creates a robust framework for identifying strategic entry points.

For example, the Blue Box zone between 102.824 and 102.072 is not only a Fibonacci retracement target but also a region where the price has historically respected the rising channel base according to price action analysis. Traders are advised to look for bullish divergences or breakouts above this zone to confirm the resumption of the uptrend. Additionally, the Fibonacci pivot point at 104.24 serves as a critical level to monitor for trend continuation as reported on Investing.com.

Risk Management: Stop-Loss, Position Sizing, and Trade Execution

While the Blue Box setup offers attractive entry points, disciplined risk management is essential. Elliott Wave Forecast emphasizes the importance of placing stop-loss orders below key resistance levels to limit downside risk according to their analysis. For instance, in a bearish Blue Box setup between 93.51 and 96.748 (as of April 2025), stops were placed at 96.748 to protect against unexpected reversals as documented in their reports. Similarly, in the current bullish context, traders should consider placing stops below the 102.072 level to manage risk effectively.

Position sizing should be adjusted based on individual risk tolerance and market volatility. While specific percentages are not detailed in the sources, the general principle of risking no more than 1–2% of capital per trade applies. For example, a trade entering the Blue Box zone with a target of 104.00 and a stop at 102.072 offers a risk-reward ratio of approximately 1:1.5, which is favorable for a high-probability setup as noted in their analysis.

Trade management strategies also include taking partial profits and moving stops to breakeven as the trade progresses. This approach was highlighted in a November 2025 update, where the AUDJPY's 5-wave decline toward 89.87–88.93 was managed by adjusting stops to lock in gains as detailed in their reports. Such tactics ensure that traders remain in the market for larger moves while minimizing exposure to adverse price swings.

Conclusion

The AUDJPY's Elliott Wave structure, combined with the Blue Box Correction framework, provides a methodical approach to navigating the current market environment. By leveraging Fibonacci retracement levels, price action, and disciplined risk management, traders can capitalize on high-probability setups while mitigating downside risk. As the pair approaches key confluence zones, the interplay between technical timing and strategic execution will be critical in determining the success of these trades.