Elliott wave analysis of EUR/JPY for October 9, 2020

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EUR/JPY is close to breaking through resistance at 124.87 for a continuation higher towards 126.46 as the next hurdle on the way higher to the former peak at 127.02. Ultimately the former higher at 127.02 should be broken too for a follow-through towards at least 129.24 and ideally closer to the 161.8 extension target of wave 1 at 135.46.

We also need to have a back-up plan if the rally from 122.34 is a leading diagonal. When we see a series of waves one's and two's in the beginning of a possible new impulsive trend, we need to consider the possibility of a leading diagonal building. If this is the case, then a break below support at 124.36 will indicate that a leading diagonal is a correct formation and a corrective decline to 123.91 and closer to 123.07 should be expected before the next strong rally higher in wave iii of 3/.

R3: 125.45

R2: 125.25

R1: 125.04

Pivot: 124.75

S1: 124.55

S2: 124.36

S3: 124.24

Trading recommendation:

We are long EUR from 123.10 and we will close 50% of our long position if support at 124.36 is broken and re-buy the 50% at 123.25 or upon a break above 124.87

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