FX.co ★ Elliott wave analysis of EUR/JPY for January 22, 2016

Wave summary:

Red wave ended a little earlier than we had expected. The bottom of red wave (v) and wave [iii] was seen at 126.14. That means a correction in wave [iv] is unfolding now. An ideal target for this correction is seen at the 38.2% corrective target of a decline from 133.25 to 126.14 and this target comes in at 129.07, which is the top of red wave (iv) of one lessor degree.

In the short term, we are going to look for a minor set-back to 126.92 before the next minor rally towards 129.07 ends wave [iv] and sets a stage for the next impulsive decline in wave [v].

Trading recommendation:

We are short EUR from 130.95 and will move our stop lower to 127.90 or take profit at 127.05.