FX.co ★ Elliott wave analysis of EUR/JPY for January 24, 2017

Wave summary:

The correction from 122.95 has extended and is currently testing the 78.6% corrective target near 121.02. Ideally this support will be able to protect the downside for a break above minor resistance at 122.15 and more importantly above resistance at 122.95 for the next rally higher toward the ideal target for wave 3 at 125.54.

That said, we need to remember, that second wave corrections are allowed to correct 100% of the first wave, but they can never ever move beyond the start of the first wave.

R3: 122.95

R2: 122.15

R1: 121.61

Pivot: 121.48

S1: 121.02

S2: 120.88

S3: 120.50

Trading recommendation:

We are long EUR from 121,40 with stop placed at 120,45. If you are not long EUR yet, then buy a break above 122.15 and use the same stop at 120.45.