Monday, December 24, 2012
Elliott wave analysis of EUR/JPY and EUR/NZD
With a low at 110.60 we could have seen the bottom of wave iv, but if this is the case we need a break above 111.51. A break above 111.51 will confirm a continuation higher towards 112.49 and higher towards 113.15 as the next target. That said, as long as minor resistance at 111.51 protects the upside we must accept the possibility of a slightly deeper correction towards 110.47 and maybe even 110.00 before the ongoing correction terminates and the next rally higher can take place. The is also a possibility of this correction to become more complex, but we need to see how things develops from here. However, one thing is clear, that we are in a correction and higher highs should be seen once this correction is finished.
With the direct break above 1.5917 we knew, that the correction was already over and a new rally higher towards 1.6004 was ongoing. However, even 1.6004 was not enough and we have seen a minor high at 1.6059. This high should soon be broken for a move to the next target near 1.6127. However, longer term we should be looking for much higher levels as wave 3 progresses with 1.6314 as a minimum target. Short term we should see 1.6010 protect the downside for a break above 1.6059 for a move towards 1.6127 as the next target. Once we have tested 1.6127 expect a new correction down to the 1.5792 - 1.5915 area, but remember that correction in wave 3 tend to be small and even sub-normal.