Elliott wave analysis of EUR/JPY for October 9, 2018

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A strong break below 130.58 was not our preferred option. This break has more implication for our short-term count. as the decline to 129.49 meant our blue wave (4) is overlapping blue wave (1), which is not allowed under the EWP, so we have changed our short-term count and moved blue wave (1) to be the peak at 133.13 and the ongoing correction is only blue wave (2).

Blue wave (2) has already spiked the 61.8% corrective target of blue wave (1) and blue wave (C) is now equal in length to blue wave (A) indicating a bottom likely is in place at 129.49 and blue wave (3) higher is about to develop.

The first good indication this is the case is a break above resistance at 130.13 and more importantly a break above resistance at 131.42 that confirms blue wave (3) towards 138.10 is developing.

R3: 131.45

R2: 130.88

R1: 130.58

Pivot: 130.13

S1: 129.72

S2: 129.49

S3: 128.99

Trading recommendation:

We bought EUR at 130.70 and have placed our stop at 129.25. If you are not long EUR yet, the buy near 129.75 and use the same stop at 129.25.

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