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Elliott wave analysis of EUR/JPY for December 4, 2015


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Wave summary:

A rally from the low of 129.62 was much stronger than expected alone resistance at 130.93, resistance at 132.50, and the invalidation point at 133.22, which has forced us to review our previous preferred count. This the previous count could not be correct upon the breakout above 133.22 as that left us with overlap between wave [i] and wave [iv], which is not allowed under the Elliott Wave Principle.

The new preferred count shows a leading diagonal from the 141.06 high has unfolded as wave (i) and wave (ii) is now ongoing for a correction back to the top of wave iv, which also marks the 61.8% corrective target at 136.70.

In the short term, the leading diagonal resistance line near 134.50 will likely protect the upside for a minor correction to 132.73 and maybe even closer to 131.64 before the next rally higher to 136.70.

Trading recommendation:

We took profit on our long EUR position at 132.25. We will buy EUR again at 131.75 with stop placed at 129.75 and take profit placed at 136.50.

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