FX.co ★ EUR/JPY Elliott wave analysis for April 12, 2013

Today's support and resistance levels:

S1: 130.07 R1: 130.52

S2: 129.75 R2: 130.90

S3: 129.38 R3: 131.25

Technical overview:

With a high at exactly 130.90, our ideal target has been hit and we expect wave iv of 5 to develop. Wave iv of 5 is expected to be a relatively small and complex correction. Ideally, it will be a triangle, but only time will tell. The ideal target for wave iv of 5 is at 127.89, but the area stretching from 127.70-128.40 is one big support area. In the short-term, we expect minor resistance at 130.81 to protect the upside for a break below 130.07 and, more importantly, a break below 129.75 that will confirm that wave iv of 5 is indeed unfolding. That said, as long as support at 129.75 has not been broken we must accept the possibility of further upside pressure, but we do think that the possible upside potential is very limited from here.

Trading recommendation:

We short EUR from 130.25 with a stop at 131.25 and take profit at 128.50. If you do not have short positions on EUR, then sell a break below 129.75 with the same stop and take profit levels.