FX.co ★ Elliott wave analysis of EUR/JPY for January 7, 2016

Wave summary:

As we expected, red wave (iii) ended at 126.97 and wave (iv) is now unfolding. This correction in red wave (iv) is more about time than the price. It means the correction is expected to shallow and pave the way for the next move lower towards 125.84 as the next downside target.

A test of the 128.04 target has already been seen and red wave (iv) could move a little higher to 128.55, but do not expect too much.

Trading recommendation:

We are short EUR from 130.95 with stop placed at 129.50. If you are not short EUR yet, then sell near 128.04 and use the same stop at 129.50.