FX.co ★ Elliott wave analysis of EUR/JPY for July 18 - 2016

Wave summary:

The rally of the 109.48 low does display an impulsive structure, but we are not out of the woods yet. Only a firm break above important resistance at 122.00 will confirm that a long-term corrective low is in place at 109.48 and a new long-term impulsive rally is developing.

In the short term, we expect to see more correction in wave [ii] closer to 114.88 from where a new impulsive rally above 122.00 is likely for a move closer to 126.45.

That said, we cannot exclude the bearish case completely yet, and the risk remains for a break below the support line near 111.85 that will call for a new low below 109.48 closer to 106.50.

Trading recommendation:

Our stop at 115.30 was hit for a small loss. We will re-buy EUR at 115.00 with stop placed at 113.25.