FX.co ★ Elliott wave analysis of EUR/JPY for January 15, 2021

EUR/JPY failed to hold above key-support at 125.97 indicating that red wave iii completed early at 127.48 and red wave iv towards 125.72 is now in motion. Once the correction is complete a new impulsive rally higher to 129.06 remains expected in red wave v.

That said, we need to be aware of the alternate count that only sees the rally to 127.48 as red sub-wave i/ and a much larger wave pattern is unfolding. Under this scenario support at 125.72 should be broken and so should support at 125.14. If a break below this support is seen, then the alternate count described above, will become the preferred count.

R3: 127.48

R2: 126.98

R1: 126.54

Pivot: 125.97

S1: 125.70

S2: 125.36

S3: 125.14

Trading recommendation:

We are long EUR from 126.25 and we will close our long position here at 125.97 for a 28 pips loss. We will re-buy EUR at 125.75.