It is possible to count 5 waves down in the EURJPY but it is also possible that wave 3 has subdivided and is still in progress. One clue that could help determine whether or not the decline from above 130 is a B wave (corrective) or a resumption of the downtrend is 1 day ATR. Notice that spikes in ATR tend to correlate with turns in the EURJPY (and other pairs for that matter). A spike occurred today so a B wave low may be near.
The GBPJPY trend remains forcefully down although the same implications are present from the ATR spike. A break below 138.94 sets the stage for a test of the all-time low at 129.32.
The sharp advance from the October 24 low of 70.92 is either wave 4 within a 5 wave drop from 125.64 or the first leg of a triangle (that will compose wave 4). Even if a triangle is underway, the CADJPY will range at lower levels before breaking below 70.
The rally from 55.01 in the AUDJPY is viewed as wave 4 within the drop from near 108. As long as price is below 70.58, expectations are for a drop below 55.01 in order to complete 5 waves down from near 108.
Interestingly, the very short term pattern in NZDJPY appears bullish. As long as price is above 49.22, this count is valid. The level at which the NZDJPY found support (52.50) is close to the 61.8% of the rally from 49.22.
Jamie Saettele writes Forex Technicals: The Day Ahead, Monday-Thursday (published 6-7 pm EST), Daily Technicals every weekday morning (9-10 am EST), COT analysis (published Monday mornings), and analysis of currency crosses throughout the week. He is also the author of Sentiment in the Forex Market.
Contact him at jsaettele@dailyfx.com
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