12.10.202006:55 Forex Analysis & Reviews: Elliott wave analysis of EUR/JPY for October 12, 2020

EUR/JPY hit a new high as expected. However, it seems that currently, the pair is unable to break above this level. This could indicate that the rally from 122.34 is a leading diagonal as discussed in Friday's article. If the rally from 122.34 is a leading diagonal, then a more substantial correction should be expected towards 123.71 or maybe even closer to the 61.8% corrective target at 123.39 should be expected before the next strong rally higher.

Only a direct break above resistance at 125.55 will invalidate the leading diagonal possiblity, while a break below minor support at 124.33 will be a strong indication that the leading diagonal possibility is the correct option.

No matter which of the two options prove correct. EUR/JPY will ultimately rally much higher and ultimately break above the former peak at 127.02.

R3: 125.55

R2: 125.06

R1: 124.75

Pivot: 124.49

S1: 124.33

S2: 124.04

S3: 123.71

Trading recommendation:

We are long EUR from 123.10 and we will close 50% of our long position upon a break below 124.35 and re-buy the 50% at 123.85.