FX.co ★ Elliott Wave analysis of EUR/JPY for February 6, 2013

Today's Support and Resistance levels:

S1: 126.84 R1: 127.81

S2: 126.49 R2: 128.98

S3: 125.73 R3: 129.18

Technical overview:

Important support at 123.87 protected the downside for a direct break above 126.05, which confirmed that we had one last rally higher. As blue wave iii of wave v was slightly shorter than blue wave i of wave v, we now know the absolute maximum length of blue wave v of wave v, which is at 129.77. Any break above 129.77 will force us to reevaluate our count. We are now getting a cluster of resistance in the 129-area. At 129.18, wave v will be 0.618 times the length traveled from the bottom of wave i to the top of wave iii. At 129.55 wave 3 will be 3 times longer than wave 1 and finally, at 129.77 blue wave v will be equal in length to blue wave iii. This means, that we will expect wave 3 to top out in the range 129.18 to 129.77 and wave 4 to take over. In the short term we will find important support at 125.73 and a break below will be the first indication, that a top is in place. However, to confirm the top we need a break below 124.01.

Trading recommendation:

We are looking for a EUR-selling opportunity. We will sell EUR at 129.10 or upon a break below 125.73 (one order cancels the other). Stop will be place at 129.85.