FX.co ★ EUR/JPY Elliott Wave analysis for March 21, 2013

Today's support and resistance levels:

S1: 123.87 R1: 124.50

S2: 123.48 R2: 124.85

S3: 123.16 R3: 125.36

Technical overview:

We still need a break above 124.87 to confirm that wave iii of 5 is developing. As long as resistance at 124.87 is not broken we have to accept the possibility that the rally from 121.56 is a correction and more corrective action is needed. That said, we do favour the scenario telling us that wave iii of 5 is developing and if this is the case, then we should expect support at 123.48 and, more likely, support in the 122.85-123.15 area to protect the downside for the rally above 124.87 and, even more importantly, a break above 125.79 to confirm wave iii of 5 towards 133.54.

Trading recommendation:

We long EUR from 124.65 with a stop at 118.70. If you do not have long positions on EUR yet, buy at 123.00 or a break above 124.37 (one order done cancels the other) with the same stop.