FX.co ★ EUR/JPY Elliott Wave analysis for February 27, 2013

Today's support and resistance levels:

S1: 120.00 R1: 120.52

S2: 119.49 R2: 121.08

S3: 118.97 R3: 121.36

Technical overview:

We are currently locked within a triangle consolidation, which should ultimately break towards the downside for a test of our ideal corrective target at 117.28, where wave 4 will have corrected 38.2% of wave 3. In the short term, a break below 118.97 confirms that the triangle consolidation is over and the final decline lower towards 117.28 is ongoing. However, as long as minor support at 120.00 and, more importantly, support at 118.97 protects the downside, we could see a move higher towards 120.77, but at no time should we see a break above 121.36 as that would indicate that this is a b wave triangle and call for a move higher to 122.74 before the final down move to 117.28 is seen.

Trading recommendation:

We short EUR from 124.45 with a stop at 121.45 and take profit at 117.50. If you have not opened short positions on EUR yet, then sell near 120.77 or upon a break below 119.69 (one order done cancels the other) with the same stop and take profit levels.