FX.co ★ Elliott Wave analysis of EUR/JPY for March 20, 2013

Today's Support and Resistance levels:

S1: 122.03 R1: 122.75

S2: 121.83 R2: 123.21

S3: 121.64 R3: 123.71

Technical overview:

The rally from 121.56 has already exhausted at 124.13 followed by a deep correction to 121.83. If wave iii of 5 has begun we cannot accept a break below 121.56 at any time. If we break below 121.56 we know that wave ii of 5 still is ongoing, but the downside should be limited. On the other hand, a break above 122.75 and, more importantly, a break above 123.70 will indicate that wave iii is indeed unfolding and we should expect a powerful rally higher towards 133.54 to develop.

Trading recommendation:

We are long EUR from 124.65 with a stop at 118.70. If you are not long EUR already then buy a break above 123.70 with the same stop.