EUR/JPY - Bear-trap sprung and indicates a ending diagonal has completed

EUR/JPY - Bear-trap sprung and indicates a ending diagonal has completed

EUR/JPY - Bear-trap sprung and indicates a ending diagonal has completed 

In my June 3 post (you can see it by clicking here), my final words was "I don't feel very comfortable about the downside and do think the downside is very limited, so please don't become overly bearish this cross and this time as a low can be found anytime now". 

Well that warning seem to be justified by the failure to build at the break below 121.46. In fact, I think that this was a nice bear-trap and that an ending diagonal has terminated at the 120.80 low and a quick return to the origin of the ending diagonal at 128.22 should be expected.

More importantly a break above the ending diagonal resistance-line near 123.80 will confirm that the long term correction from 149.56 finally has come to an end and a new impulsive rally finally can begin, with the first larger target being the 141.06 resistance.

Only a failure to break above the resistance-line near 123.80 and break back below 120.80 revives the 117.95 - 118.20 target, but that seems pretty unlikely to happen.  

EUR/JPY - Corrective low could be in place with the test of 121.69

EUR/JPY - Corrective low could be in place with the test of 121.69

EUR/JPY - Corrective low could be in place with the test of 121.69

EUR/JPY - Corrective low could be in place with the test of 121.69 

With a break to a new low at 121.69 a corrective low for wave [2] could be in place. If a low has been seen, we should soon see a break above resistance at 123.04 and more importantly a break above 123.57 confirming that a long term low is in place for a new impulsive rally to above 149.79. 

That said, we need to respect the possibility of a little more downside pressure towards 120.45 as long as minor resistance at 123.04 holds firm, but we are clearly in the final part of the corrective decline from 149.79 and a corrective low could be found anytime now. 

EUR/JPY - Correction to 141.70 before higher to 146.15

EUR/JPY - Correction to 141.40 before higher to 146.15

EUR/JPY is correcting to 141.70 before higher to 146.15 

Red wave iii extended directly to the next target at 144.64 (the high for red wave iii came in at 144.22). We are now in red wave iv, which should correct lower to 141.70 before the next impulsive rally higher to 146.15 in red wave v and to end wave iii. 

Short term I expect minor resistance at 143.46 to protect the upside for a break below minor support at 142.83 to confirm the decline in red wave iv to 141.70. 

EUR/JPY - Correction over at 1.3701 or not?

EUR/JPY - Correction over at 137.01 or not?

EUR/JPY correction over at 137.01 or not? 

The rally from 135.21 has been stronger than anticipated, but the origin of wave i at 137.01 is still unbroken. Under the Elliott Wave Principle second waves are allowed to correct 100% of the first wave, this is especially common in the currency market.

So at this point we are left undecided, whether wave B is in place at 137.01 or wave B still needs a rally higher to the 137.82 - 137.94 area in wave c of B. I slightly prefer the count, where wave B is in place at 137.01, but to prove this count, we need a break below support at 136.52 and more importantly a break below support at 136.04, that will call for the next impulsive decline to at least 134.09 and possibly even lower to 133.40 in wave iii.

 

EUR/JPY - Doubl zig-zag correction unfolding

EUR/JPY - Double zig-zag correction unfolding

EUR/JPY a double zig-zag correction is unfolding 

With the break below support at 135.73 it's clear that the rally to 141.22 was an X-wave and a second zig-zag correction is unfolding. The minimum target is at 133.52, which marks the 23.6% corrective target of the rally from 94.10 to 145.69, however, a more common target would be the 38.2% corrective target at 125.98. That said, the correction from 145.69 has taken a lot of time and corrections either use up price or time and in this case, time seems to be essential.

Short term strong resistance is now found at 137.07, which ideally will protect the upside for the decline to at least 133.52.  

Today's Free Elliott Wave Analysis: EUR/JPY - Invers S/H/S in play

EUR/JPY - Invers S/H/S bottom in play

EUR/JPY invers S/H/S bottom in play

The failure to even break back below Fridays low at 136.42 is a sing of underlying strength and the invers S/H/S bottom is now in play. We still need a break above the neck-line resistance at 138.00 to activate this bottom, but a break above resistance at 137.66 will call for a strong test of this neckline resistance and a break above 138.00 will call for a continuation towards 140.19 and maybe even higher.

In the larger picture the failure to reach the equality target between wave A and C is also a sign of underlying strength in this cross. We knew, that we was looking at a correction from 145.69 as the question now is, whether this correction is going to be even more complex. At this point it's impossible to say, so we will have to assume, that wave II is in place and a strong wave III is developing. If this is the case then we will see 145.69 broken for a continuation higher to at least 187.09. 

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Roelant
2016-06-26
Hi Elliotwavesurfer,

Your forecast of the EURUSD waves and reversals on Brexit day were spot on! This was not chaos, the crowd followed a pattern!

GBPUSD was abolutely 100% too!Unbelievably accu...
Thomas
2014-08-11
Sublime Counts!
Duane
2014-08-29
Hey EWS,

Great work on the GBPCAD and the NZDCAD. These are the type of opportunities that I am looking for, monthly turns caught with daily or hourly entries. Easy money!!

Duane