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06.10.201505:35 Forex Analysis & Reviews: Elliott wave analysis of EUR/JPY for October 6, 2015

Long-term review

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Technical summary:

Yesterday , a breakout above 135.10 indicated that wave 2 ended at 132.23 and wave 3 higher was already developing. If this count is correct, support at 133.48 must protect the downside for a strong rally higher to at least 141.00 and possibly even higher.

As wave (ii) of 3 was an expanded flat correction, we know that the likelihood of wave (iii) extending is very high. That means wave (iii) should be at least 161.8% times the length of wave (i).

In the short term, we will ideally see support at 134.28, but we must accept the possibility of a deeper corrective decline from 135.71. A breakout below 133.48 will invalidate the bullish count.

Trading recommendation:

We bought EUR at 135.10 and will place our stop at 133.45 expecting to raise it quickly. If you are not long EUR yet, buy EUR near 134.28 or upon a breakout above 135.71 using the same stop.

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