Thursday, December 13, 2012
Elliott wave analysis of EUR/JPY and EUR/NZD
There was no time for even a minor correction yesterday and if there was any doubt left, that wave iii of 3 is developing, There is absolutely no doubt any more. The major rally we saw yesterday is exactly the price-behavior we expect from wave iii of 3. It is tempting to cash in some nice profit, after yesterdays run, but that will likely just mean, that we misses the next rally higher towards the 110.84 to 111.43 area. Even though resistance at 111.43 seems to be a major resistance, the risk is, that this resistance will be broken without any trouble for a continuation higher towards 113.53. Short term we now have support at 109.45 and again at 108.60.
Resistance at 1.5528 keeps protecting the upside, but I do think it is only a matter of time before this resistance level will be broken and a major bullish potential is released. Once we break above 1.5528 we should quickly see resistance at 1.5600 broken too for a continuation higher, towards the next strong resistance near 1.5904. That said, we must be aware of the downside risk as long as resistance at 1.5528 has not been broken. We do not prefer the option of a quick spike below 1.5457, but of cause can not rule out the possibility. However, one this is for sure. a break below 1.5390 can not be allowed at any point, as that would call for a more bearish scenario.