FX.co ★ EUR/JPY Analysis for February 28, 2013

EUR/JPY Elliott Wave
For the last few days the EUR/JPY pair was trading sideways, corrective wave 4 (coloured blue) of the bigger (C) wave (coloured green). Yesterday, during the Asian session, we could observe a descending movement from 120.41 towards the 119.20 level and we can consider this move as the end of the sub-wave B of the 4 wave. Therefore, during the European and New York sessions, this currency did not manage to hold this level and price started pushing higher reaching a 121.79 level. This move can be consider as the end of the corrective wave 4 (coloured blue). At the moment the EUR/JPY pair is trading around 120.95 level and we are expecting to see price around 118.20 level soon. In accordance with our wave rules and taking into account that the wave 5 should retrace 100% of the wave 1, we can define the potential targets with measuring wave 1 with take profit at 118.17 (100% of wave 1). To reduce the risk, we can use invalidation at 122.24 level as stop loss.

Support and Resistance
(S3) 118.34 (S2) 119.20 (S1) 119.73 (PP) 120.59 (R1) 121.45 (R2) 121.98 (R3) 122.84

Trading Forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the downward movement. That is why short positions at level 120.80 with stop loss at 122.24 and take profit at 118.17 are recommended.