FX.co ★ Elliott wave analysis of EUR/JPY for December 22 - 2016

Wave summary:

Liquidity has dried up and activity is quite sluggish. As long as minor resistance at 123.01 caps the upside, we continue to look for one more decline closer to 119.70 before the correction in wave (iv) is complete and the final rally in wave 3 closer to 126.54 is expected.

An unexpected break above 123.01 will weaken the case for one more decline towards 119.70, but only a break above 123.64 will confirm that wave (iv) ended early and wave (v) of 3 higher towards 126.54 is already unfolding.

Trading recommendation:

We are short EUR from 123.50 with stop placed at 123.05 and take profit set at 120.25.