Elliott wave analysis of EUR/JPY for August 24, 2018

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Red wave iii extended even further than first expected and is currently testing the 200% extension of red wave i. Even though red wave iii could extend further towards the 261.8% extension target at 129.74, the rally in red wave iii looks a bit overextended and could need a rest by now for a correction in red wave iv.

A correction in red wave iv should ideally take us down to the 38.2% corrective target of red wave iii at 127.55 before the final pop in red wave v towards resistance in the 129.45 - 129.74 area.

Short-term a break below 128.19 will confirm that red wave iii has completed and red wave iv is developing.

R3: 129.74

R2: 129.45

R1: 128.77

Pivot: 128.19

S1: 127.90

S2: 127.55

S3: 127.33

Trading recommendation:

We took profit on our last 50% holding at 128.75 for a nice 249 pips profit. We will wait a buy EUR again at 127.60.

The material has been provided by InstaForex Company - www.instaforex.com