FX.co ★ Elliott wave analysis of EUR/JPY for September 17, 2020

Yesterday, we saw an unexpected break below 124.37. It signals the correction in wave 2/ from 127.07 still is in motion and just has turned more complicated. The rally of the 124.37 low was in five waves, but not the start of a new impulsive uptrend as we first expected, but rather a failed c/ wave of wave B/ and the following decline from 126.46 is wave C. We have recalculated the possible target for the possible bottom om wave C/ and the most likely target is seen at 122.15 where wave 2/ will have corrected 61.8% of wave 1/.

In the short-term, we will look for a temporary low at 123.03 for a correction towards 123.91 and the final decline to 122.15 to complete wave C/ and 2/.

R3: 124.29

R2: 124.10

R1: 123.84

Pivot: 123.61

S1: 123.29

S2: 123.03

S3: 122.75

Trading recommendation:

Our stop at 124.35 was hit for a small loss of only 6 pips. We will sell EUR at 123.90 and place our stop at 125.22.