FX.co ★ Elliott Wave Analysis of EUR/JPY for December 12, 2012

Today's Support and Resistance Levels:

S1: 107.21 R1: 107.52

S2: 106.92 R2: 107.95

S3: 106.56 R3: 108.55

Technical Overview:

The rally from the 105.97 is clearly impulsive in its character, which is the first indication that wave iii of 3 is developing. At the same time we are breaking through resistances very smoothly, which is the next good indication, that this rally is impulsive. That said, we are getting close to the 107.96 top and should expect some kind of correction before this resistance is broken for the a move higher towards 110.84 as the next major target. In the short term we expect that resistance in the 107.52 - 107.67 area will protect the upside for a correction down to 106.92 and maybe even 106.56 before the next powerful rally sets in.

Trading Recommendation:

We bought EUR at 106.75 with a stop at 105.95. If you are not long EUR already, then use a correction towards 106.92 to buy EUR with the same stop.