FX.co ★ Elliott Wave Analysis of EUR/JPY for December 11, 2012

Today's Support and Resistance Levels:

S1: 106.44 R1: 106.73

S2: 106.26 R2: 107.08

S3: 105.98 R3: 107.48

Technical Overview:

We saw a new low at 105.98 yesterday followed by a rally to resistance near 106.67. This rally could well be the start of wave iii of 3 higher. If this is the case we should see a minor correction towards the 106.26 - 106-35 area. Here the next rally higher should break above 106.73 without much trouble, for a continuation higher towards 107.98 and much higher in the long term. The risk is of cause a break below 105.98 that will tell us that a deeper correction towards 105.28 is needed before wave iii of 3 is ready to take off. Even though correction in wave 3 tends to be small and even sub-normal, it may develop into something more complex.

Trading Recmmendation:

We will buy EUR at 106.30 or a break above 106.73 (buy at 106.75) with a stop at 105.95.