FX.co ★ Elliott Wave analysis of EUR/JPY for March 28, 2013

Today's Support and Resistance levels:

S1: 120.12 R1: 120.78

S2: 119.50 R2: 121.18

S3: 119.00 R3: 121.88

Technical overview:

As support at 120.75 could not protect the downside, then a new low slightly below 120.08 was expected and that is exactly what we have seen. We are approaching the bottom and we can observe a clear loss of downside momentum, but as long as minor resistance at 120.78 and, more importantly, resistance at 121.88 protect the upside we must accept slightly new lows. That said, at no time a break below 118.73 can be accepted as, that will invalidate our bullish count. A break above minor resistance at 120.78 will ease the downside pressure, but only a break above resistance at 121.80 will confirm that a bottom is in place for the next powerful rally higher.

Trading recommendation:

We are long EUR from 124.65 with a stop at 118.70. If you are not long EUR yet, then buy a break above 120.78 or, more importantly, buy a break above 121.88 with the same stop.