FX.co ★ Elliott Wave analysis of EUR/JPY for April 3, 2013

Today's Support and Resistance levels:

S1: 119.44 R1: 120.25

S2: 119.14 R2: 120.86

S3: 118.73 R3: 121.53

Technical overview:

Now there is lack of downside momentum and a small ending diagonal building, which indicates that we are close to a bottom, but we need confirmation, that a bottom is indeed in place. A bottom will be confirmed if we see a break above 120.86 and, more importantly, a break above 121.87, which will confirm a new rally higher towards at least 124.50 and possibly even higher trough 127.70 if wave iii of 5 is developing. However, as long as support at 120.86 is protecting the upside we cannot rule out more downside pressure, but it should be very limited and only a break below 118.73 will invalidate our bullish scenario and indicate a decline to 117.05 before the next rally higher.

Trading recommendation:

We are long EUR from 124.65 with a stop at 118.70. If you are not long EUR already, then we recommend buying EUR upon a break above 120.86 with the same stop.