EUR/JPY has been very difficult to interpret as of late, notes Goldman Sachs.
"EURJPY completed a 5-wave sequence at the December '14 high. The pullback since Dec. '14 looks like an incomplete ABC pattern. Wave C has an equality target down at ~117.45 which is still another ~10% from the recent lows.
Not only is there quite a bit of room to play catch up, it's also somewhat concerning that oscillators are at the base of their range rather than at the highs. Moreover the decline since August is looking like a descending wedge which is by nature a bullish pattern," GS clarifies.
"Put another way, this may not be the cleanest expression of the JPY/crosses, at least for now. Might target 128.47- 126.46 in the short-term, but need a clean break below this congestion area before chasing the larger move down towards ~117.45," GS argues.
