EUR/JPY Elliott Wave Analysis

EUR/JPY – 122.69

EUR/JPY: Wave 2 correction from 139.26 is still unfolding and may fall to 119.00

Despite Monday's marginal rise to 125.36, as the single currency failed to close above indicated resistance at 125.24 on a daily basis, the retreat from there suggests further consolidation would be seen and weakness to 121.00 cannot be ruled out, however, only break of 120.00 would signal the final leg of wave c decline is still in progress and bring retest of 119.66, then 119.00 and possibly 118.01 (50% projection of 134.37-119.66 measuring from 125.36) but reckon 116.27 (61.8% projection) would hold.

Our preferred count remains that the upmove from 112.08 is wave 1 of C has ended at 139.26 with minor wave iii ended at 137.42, followed by triangle wave iv at 126.98, then wave v at 139.26. The move from there is wave 2 and is unfolding as a triple three,. abc-x-abc-x-abc, and is labeled as: first set of a-b-c ended at 127.00, then x wave at 138.72, followed by second set of a-b-c at 129.02, then another x wave at 138.49 with the third set of a-b-c marked as: a-126.95, b-134.37 and the c leg has either ended at 119.66 or may extend one more fall to 118.00/05 but 116.25/30 should hold.

On the upside, a daily close above said resistance at 125.36 would signal the c leg has ended at 119.66 earlier and rebound to 126.95/00 would follow, break there confirm, then rise to 128.00 would be seen.

To re-cap the corrective upmove from the record low of 88.93 (18 Oct 2000), the wave A from there is subdivided as: 1:88.93-113.72, 2:99.88 (1 Jun 2001), 3:140.91 (30 May 2003), 4:124.17 (10 Nov 2003) and 5 ended at record high of 169.97 (21 Jul 2008). The brief but sharp selloff to 112.08 is viewed as a-b-c x a-b-c wave B. The subsequent rally from 112.08 showed impulsive structure, therefore, we labeled it as wave 1 of C

The long-term downtrend started from calculated price of 359.26 (Dec 1979). The sharp fall from there to 226.60 (Aug 1981) with impulsive structure is labeled as wave I and wave II was capped at 256.59 (Nov 1982). Wave III decline was contained at 140.58 (Feb 1989), the subsequent rebound to 198.59 (Aug 1990) is seen as wave IV, the subsequent 5-wavers decline from there finished at 88.93 (18 Oct 2000). The strong rebound from there to 169.97 (21 Jul 2008) is tentatively viewed as wave A and wave B selloff was followed and is possibly ended at 112.08 (21 Jan 2009). Our alternate count is that entire wave IV correction already ended at 169.97, hence fall to 112.08 would be treated as the wave 1 of V.