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

Wave summary:

The break below minor support at 114.98 questioned the previous count and we have instead adopted an even more long term bullish count. This count shows that we completed blue wave (i) at 116.37 and the ongoing corrective decline is blue wave (ii). This count remains valid as long as we stay above support at 113.11.

Focusing on blue wave (ii) it does not yet look complete, calling for a move closer to 113.48 before the next possible low.

That said, remember that second waves are allowed to correct 100% of the first wave, but never ever is allowed to break below the starting point of the first wave.

Trading recommendation:

Our stop at 114.90 was hit for a nice profit. We will buy EUR again at 113.50 with stop placed at 113.05.