EURJPYEURJPY Technical and Fundamental Analysis (Jan 23–30)
Overview:
EURJPY is presenting a compelling setup on the higher timeframes, aligning across XXXJPY pairs for a potential major Wave C decline. From the weekly chart, the current price action appears to be the beginning of a large corrective Wave C, with a longer-term target below 154. Structurally, we have a completed five-wave impulse down, followed by a clear corrective Wave A. The next likely steps are a Wave B retracement and then a deeper Wave C to complete the correction.
Current price action shows EURJPY at a decision point, with resistance between 163.76 and 164.52. A failure to break this zone signals a likely continuation of the downward trend.
Elliott Wave Context:
Weekly Structure:
This is likely the start of a major corrective Wave C targeting below 154. The pattern is consistent with other XXXJPY pairs, suggesting broad yen strength.
Current Wave Progression:
Five waves down completed.
Clear corrective Wave A upward.
Expecting a Wave B retracement (lower high) before a deeper Wave C.
Key Levels to Watch:
Resistance:
163.76: Key 61.8% Fibonacci retracement of the prior impulse down.
164.52: Major structural resistance, invalidation for further bearish outlook.
Support:
161.67: 38.2% Fibonacci retracement, potential Wave B target.
154.00: Long-term Wave C target zone.
Scenarios for Upcoming Events:
Eurozone Flash PMI (Jan 24):
Bearish: Weak PMI data fuels euro weakness, accelerating the Wave C decline.
Bullish: Strong PMI data supports euro strength, pushing EURJPY higher into the 163.76–164.52 resistance zone.
Tokyo CPI (Jan 26):
Bearish: Higher-than-expected CPI reinforces BoJ tightening expectations, strengthening the yen and driving EURJPY lower.
Bullish: Weak CPI data reduces yen demand, allowing EURJPY to extend its correction higher.
U.S. PCE Inflation Data (Jan 26):
Bearish: Risk-off sentiment from strong U.S. inflation supports the yen as a safe haven, dragging EURJPY down.
Bullish: Softer U.S. inflation drives risk appetite, weakening the yen and lifting EURJPY temporarily.
Final Thoughts:
EURJPY is at a critical juncture. The Wave B retracement offers an opportunity to join the larger bearish trend if resistance holds. The longer-term Wave C is expected to target below 154, aligning with higher timeframe structures. Monitor invalidation points (above 164.52) and upcoming economic data closely to adapt trading strategies. Remember to stay disciplined and follow Elliott Wave rules.
EURJPY Buy setup is on.
