CAD/JPY
The pattern consists of four key price swings (X-A, A-B, B-C, C-D), forming an "M" shape. The bearish butterfly is typically observed at the end of an uptrend and signals a potential reversal to the downside.
X to A: The initial leg is an upward price move.
A to B: A retracement of the X-A leg, typically around 78.6% of the X-A move.
B to C: A corrective move higher, often retracing 38.2% to 88.6% of the A-B leg.
C to D: The final leg extends beyond the initial X-A move, completing at 127.2% or 161.8% Fibonacci extension of the X-A leg.
X to A: The initial leg is an upward price move.
A to B: A retracement of the X-A leg, typically around 78.6% of the X-A move.
B to C: A corrective move higher, often retracing 38.2% to 88.6% of the A-B leg.
C to D: The final leg extends beyond the initial X-A move, completing at 127.2% or 161.8% Fibonacci extension of the X-A leg.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.