EURJPY shows a bullish sequence from June 2016 low and May 2020 low. Long term, pair should be supported and continue higher. Short term, however, pair has ended the rally from March 7, 2022 low at 140 with wave ((1)). Wave ((2)) pullback is currently in progress to correct the rally from March 7 low before it resumes the rally again. Wave ((2)) is unfolding as a zigzag Elliott Wave structure. Down from wave ((1)), wave 1 ended at 138.23 and rally in wave 2 ended at 139.48. Pair then resumes lower in wave 3 towards 136.45 and rally in wave 4 ended at 137.54. Final leg lower wave 5 ended at 135 which also completed wave (A).
Pair should rally in wave (B) to correct cycle from April 21 before the decline resumes. Internal of wave (B) is proposed to unfold in 3 waves taking the form of zigzag structure before the next leg lower. Expect pair to extend higher to end wave A, then it should pullback in wave B before another leg higher in wave C to complete wave (B). Afterwards, pair should resume lower in wave (C) of ((2)). Near term, as far as April 21 pivot high at 140 remains intact, expect the rally to fail in the sequence of 3, 7, or 11 swing for further downside.
