FX.co ★ USD/JPY Analysis for February 26, 2013

USD/JPY Elliott Wave
Since our last analyses the USD/JPY pair has been trading downwards, so we need to change our count a little bit. Yesterday, during the early Asian session we could observe ascending movement towards the 94.51 level and we can consider this movement as the end of the wave 5 (colored purple) of the bigger (3) wave (colored blue). Therefore, during the European and New York session when development of the corrective wave (4) starts, price pushed more than 350 pips lower and reached 90.83 level. We can consider this movement as the end of the first sub-wave A (colored purple) of the (4) wave. At the moment the USD/JPY pair is trading around 92.00 level and we expect another sharp downward move when development of the sub-wave C starts. In accordance with our wave rules and taking into account that the wave C should retrace 100% of the wave A, we can define the potential targets with measuring wave A with take profit at 89.56 (100% of wave A). To reduce the risk, we can use invalidation at 94.00 level as stop loss.

Support and Resistance
(S3) 88.79 (S2) 90.16 (S1) 91.01 (PP) 92.38 (R1) 93.75 (R2) 94.60 (R3) 95.97

Trading Forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the downward movement. That is why short positions at level 93.10 with stop loss at 94.00 and take profit at 89.56 are recommended.