Elliott wave analysis of EUR/JPY for August 30, 2018

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Was the corrective spike to 129.55 it? We do not think that this extremely small correction in regards to the rally from 124.89 to 130.28 even comes near fulfilling the requirements for wave ii/ being complete. So either an expanded flat or a running expanded flat is developing or a much more bullish rally is developing.

We slightly prefer the expanded flat, which calls for a new dip below 129.55 and ideally down to at least the 38.2% corrective target at 128.29. Or in the more rare case a running expanded flat is developing. In this case wave c/ of ii/ is not able to break back below 129.55, but will just take up more time to complete the correction in wave ii/. There is no question that impatient should be considered here, but a running expanded flat is rare and we will look for a regular expanded flat as our first option.

Only a break above 131.15 will shift our preferred count in favor of the much more bullish alternate count.

R3: 131.38

R2: 131.15

R1: 130.85

Pivot: 130.30

S1: 129.89

S2: 129.55

S3: 129.18

Trading recommendation:

We sold EUR at 129.68 with our stop placed at 131.35. Upon a break below support at 130.29 we will move our stop lower to 130.90. We will take profit at 128.50.

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