FX.co ★ EUR/JPY Elliott Wave analysis for January 21, 2013

Today's support and resistance levels:

S1: 119.07 R1: 119.63

S2: 118.76 R2: 119.95

S3: 118.20 R3: 120.43

Technical overview:

The correction from 120.28 became a little deeper than we expected, but it has not changed our view in any way. We regard the decline from 120.28 down to 119.07 as the wave 4 and should soon see the wave 5 moving higher through 120.28 for a rally towards the ideal target near 121.28. However, once we reach the target near 121.28, we should expect a big correction down to the 113.54 - 116.00 area, where we find the wave 4 of one lessor degree. This would be the first target zone. We will look for the expected wave 4 to end. However, we will have more clues once the wave 3 finally ends, and we can calculate the Fibonacci retracement targets, but for now we should stay focused on the upside for one last rally higher towards 121.28

Trading recommendation:

We will buy EUR here at 119.41 with a stop at 118.15 and take profit+revers at 121.00.