07.06.201610:53 Forex Analysis & Reviews: Elliott wave analysis of EUR/JPY for June 7 - 2016

Wave summary:

As we said yesterday, failure to build on the break below 121.46 could indicate that downside potential is very limited (bear-trap). It looks like an ending diagonal is developed and the break to 121.46 was the final low in this ending diagonal. If this count is correct, then a quick rally and break above the ending diagonal resistance line near 123.54 should be expected. If a break above the ending diagonal resistance line and more importantly a break above resistance at 124.19 can be seen so we will call for a quick return to the origin of the ending diagonal at 128.05 and more importantly call for the completion of the corrective decline from 149.56.

Short-term support is seen at 121.64 with back-up support at 120.80.

Trading recommendation:

We bought the EUR at 121.70 with our stop placed at 120.75. If you are not long on the EUR yet, then buy near 121.64 and use the same stop at 120.75