We wrote last week that “Ii a triangle is unfolding, then the EURJPY must remain below 167.73 (top of wave B).” That has not happened as the pair actually poked through that level today. This leaves us with the count that we thought least probable as the correct count. The pattern since the 7/13 high is treated as a completed A-B-C correction (with wave C truncated). A near term bullish bias is warranted above 161.73. We urge caution here given the range trading nature of the market right now and conflicting counts with the other Yen pairs.
The advance from 192.60 is ideally wave 4 within what will probably be a 5 wave drop from 251.10. The pair has stalled at the 38.2% of 242.60-192.60 at 211.70 (reinforced by Elliott channel resistance) and the 100% extension of 192.60-208.94/199.79 at 216.13. This is the ideal point for a top.
We continue to pay attention to a potential A-B-C advance from the 2000 low at 58.82. Wave C would equal wave A (arithmetically) at 112.27. Short term, a correction back to at least 102.60 is likely before a thrust to new highs in a small 5th wave.
As long as price is below 107.10, we maintain that the CADJPY is headed lower longer term. A push through that level would make the advance from 95.68 5 waves and turn the longer term prospects bullish but not before a correction back to at least 102.50.
The rally from 88.17-101.09 is in 5 waves and is either a 1st wave or A wave. Therefore, wave 2 or B will begin very soon and bring the AUDJPY back to at least 96.15 (former 4th wave).
The NZDJPY remains stuck in a choppy consolidation and probably will for some time. That is not to say that there will not be rewarding range opportunities though. In fact, there are 2 counts that suggest the next move is higher. If a triangle is unfolding since the July 2007 top at 97.74, then wave D is probably underway now to around 88. If a large flat is unfolding since the July top, then wave B of that flat is probably underway now and will exceed 91.42 in the next few months.
Tell us what you think about this report: contact the strategist about the article at jsaettele@dailyfx.com
TREND ANALYSIS is based on a rolling pivot model. LONG TERM TREND is determined by the last 3 months of price data (high, low, close). SHORT TERM TREND is determined by the last 4 weeks of price data (high, low, close). R3, R2, R1, PL, PH, S1, S2, and S3 are provided to aid in identifying entries and exits. These are objective measures and our subjective analysis (STRATEGY) may differ.
SCHEDULE
Monday: EURGBP, EURCHF, EURCAD, EURAUD, EURNZD
Tuesday: EURJPY, GBPJPY, CHFJPY, CADJPY, AUDJPY, NZDJPY
Wednesday: GBPCHF, GBPCAD, GBPAUD, GBPNZD
Thursday: AUDCHF, AUDCAD, AUDNZD
