Wednesday, December 19, 2012
Elliott wave analysis of EUR/JPY and EUR/NZD
With the break above 111.43 we have had the next long term confirmation, that a very important long term bottom is in place at 94.10. With the break above 111.43 we should also be looking forward to a test of the next major resistance at 113.68 soon. Will 113.68 mark a top? Not likely it will rather mark a short term top for yet another minor or even sub-normal correction before the next advance higher towards 116.38 and likely even 117.17, where wave 3 is 1.618 times longer than wave 1. I have said for quiet some time now, that I expected this wave 3 to be an extended wave and with the break above 111.43, that seems to be the case. Short term support will be at 111.26 and again at 110.81.
Once resistance at 1.5600 finally gave away there was no looking back and we are now well on the way to test strong resistance at 1.5927. However, resistance 1.5927 should only be able to put up a fight for so long and once it is broken the next target is 1.6011. Short term support should be found at 1.5771 and a more solid support at 1.5739. That said, it should be remembered that we are in wave iii of 3 and corrections during wave 3 tend to be small and even sub-normal, so do not expect too much price-action towards the downside.