FX.co ★ Elliott Wave analysis of EUR/JPY for March 19, 2013

Today's Support and Resistance levels:

S1: 123.62 R1: 124.20

S2: 123.21 R2: 124.84

S3: 122.87 R3: 125.36

Technical overview:

As expected the yesterday’s gap is almost closed. We should expect resistance at 124.21 to protect the upside for a minor correction back to the 122.57 - 122.87 area. Here we expect the next rally higher. That said, we still need more confirmation that wave iii of 5 is developing. A break above 124.84 and of course, more important, a break above 125.79 will confirm that wave iii of 5 is indeed ongoing. The target for wave iii of 5 is at 133.54, where wave iii will be 1.618 times the length of wave i, but until the break above 124.84 is not materialized we must accept the possibility of a small set-back towards the 122.57 - 122.87 area first.

Trading recommendation:

We are long EUR from 124.65 and will keep our stop at 118.70 for now. If you are not long EUR already, then buy near 122.87 with the same stop.