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

Today's support and resistance levels:

S1: 121.58 R1: 121.93

S2: 121.19 R2: 122.36

S3: 120.75 R3: 122.84

Technical overview:

We have seen a break above minor resistance at 121.56, which was the first good indication that a bottom might be in place with the test of 120.08. That said, the rally of the 120.08 low is not yet convincing and we need more proof in form of a break above 122.84 and, more importantly, a break above 123.38 to confirm the bottom and that wave iii of 5 is developing. In the short term, we would like to see support at 121.58 and, more importantly, support at 120.75 to protect the downside for the next rally higher. A break below 120.75 will open up for a new test of 120.08 and possibly slightly below.

Trading recommendation:

We long EUR from 124.65 with a stop at 118.70. If you do not have long positions on EUR already, then we would recommend buying at around 121.58 with the same stop.