FX.co ★ AUD/JPY analysis for February 18, 2013

AUD/JPY Elliott Wave
LLast week the AUD/JPY pair was trading downwards, impulsive wave (1) (coloured green) of the bigger (C) wave (coloured red) was developing. During the Friday's Asian session the AUD/JPY pair pushed slightly lower and the price reached 95.52 level, we can consider this movement as the end of the (1) wave (coloured green). Therefore, during the European and New York sessions this exotic currency did not manage to hold this level and the price started pushing higher reaching a new high at 96.68 level. At the moment the AUD/JPY pair is trading around 97.75 level and we expect to see the price below 94.60 level when development of the (3) wave (coloured green) ends. In accordance with our wave rules and taking into account that the wave 3 should retrace 161.8% of the wave 1 we can define the potential targets with measuring wave 1 with take profit at 94.55 (161.8% of wave 1). To reduce the risk, we can use invalidation at 97.43 level as stop loss.

Support and Resistance
(S3) 95.02 (S2) 95.46 (S1) 95.74 (PP) 96.18 (R1) 96.62 (R2) 96.90 (R3) 97.34

Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the downward movement. That is why short positions at level 96.50 with stop loss 97.43 and take profit at 94.55 are recommended.