FX.co ★ Elliott wave analysis of EUR/JPY for May 23, 2018

The break above resistance at 131.13 complicated everything here, as it opens more questions, than providing answers. Did wave b terminate at 129.49 or is wave b still developing as a flat? If wave b did complete at 129.49 was the rally from 129.49 to 131.13 only wave a of y and the expanded flat correction that followed only wave b of y? or maybe, did the rally to 131.35 complete the entire correction in wave iv and wave v lower towards the ideal target near 125.32 is now developing?

As long as support at 129.49 is able to protect the downside, we must assume, that the corrective rally in wave iv from 129.22 continues to develop and still could make it to 131.67. However, a break below 129.49 will favor wave iv being complete and wave v lower towards 125.32 developing.

R3: 131.35

R2: 130.60

R1: 130.27

Pivot: 130.01

S1: 129.73

S2: 129.49

S3: 129.22

Trading recommendation:

Our stop at for a small loss of 47 pips. We will stay sidelined and see what option turns out to be the most likely.