In our previous analysis of EURJPY we said that “the count would need to be reassessed, if the EURJPY exchange rate returns above 137.00.” The pair climbed to 141.05 in the beginning of June and is now trading around 138.65. So, it is time for the reassessment. The last time we thought EURJPY was going to complete an expanding flat correction and head south. This idea is still valid. The only difference is in the length of wave C of the pattern. A month ago, we assumed wave C is over at 136.96. Now we believe it is going to reach 142.20, before the bears return. The next chart explains why.
As visible, wave C of the corrective pattern does not seem to be finished yet. It is supposed to be a five-wave impulse, but its fifth wave is currently missing. That is why we think we should expect wave 5 of C before the whole wave (2/B) flat retracement is over. Ideally, EURJPY should reverse to the south between 142 and 143, since there is the 61.8% Fibonacci level. In conclusion, as long as wave 1 and 4 of C do not overlap, we will be waiting for wave 5 up. However, the bulls should be careful, because the bears might be setting up a trap.
