FX.co ★ USD/JPY analysis for February 8, 2013

USD/JPY Elliott Wave
For the last few months the USD/JPY pair was trading upwards, impulsive 5 wave (coloured purple) of the bigger (3) wave (coloured blue) was developing. Yesterday during the Asian and European sessions we could observe descending movement from 93.90 towards the 93.08 level. Therefore, during the New York session this major pair did not manage to hold this levels and the price retraced back to 93.72. At the moment the USD/JPY pair is trading around 92.50 level and we think that this is just a start of the corrective (4) wave so we are looking for short positions for the next few weeks. In accordance with our wave rules and taking into account that the wave 4 should retrace 38.2% of the wave 3, we can define the potential targets with measuring wave 3 with take profit at 87.58 (38.2% of wave 3).

Support and Resistance
(S3) 92.69 (S2) 93.01 (S1) 93.21 (PP) 93.53 (R1) 93.85 (R2) 94.05 (R3) 94.37

Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the downward movement. That is why short positions at level 92.40 with stop loss 94.05 and take profit at 87.58 are recommended.