EURJPY has been falling almost freely since mid-March with insignificant pullbacks. The immediate bearish trend is so strong. Will the bullish move resume any time soon. What emerging pattern calls for the rally. These questions are answered below based on 18 April EURJPY Elliott wave forecast.
18 April, AtoZForex - EURJPY broke below 119.30 down to 115. We had earlier taken the dip as a correction of the previous impulse wave. Price didn't wait but release a strong bearish trend. It is good to look at this move from the context of Elliott wave theory to speculate the strength of the prevailing trend and check if a reversal or correction will come soon. In the last update, we used the following chart.
The chart above shows the emergence of a double zigzag corrective pattern. The double zigzag is labelled w), x) and y). Wave w) and y) are also zigzags. Double zigzags are deep corrective patterns. The probable level of reversals are 119.3 to 120. A simple divergence or reversal candlestick or chart patterns will be useful. A break above the channel will all but confirm the bullish resurgence.
There was no sign of reversal. It is important to use other tools like divergence, candlestick pattern, trendline breakout etc to confirm trade entries after a pattern is completed. We also warned in the last update thus:
Conversely, a strong dip below 119.30 will hamper the near-term bullish reversal and set price on a continuous bearish drive below 118.20.
That was the point the pattern was invalidated and the bearish move didn't look back since then. What do we have now?. Has price gotten to a juncture to consider bullish moves?
18 April EURJPY Elliott wave forecast: bullish forecast?
The daily chart above shows the long term view. A double zigzag is at the verge of completion. This double zigzag is the wave X) (second leg) of the long term double zigzag upside.A break above 117.97 would be enough to confirm this. If the break happens, rally to 125.8 in the coming weeks is likely. The chart below shows the sub-waves of this pattern.
A dip below 114.61 will lead to more bearish move to 112.5.
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