FX.co ★ Elliott Wave analysis of EUR/JPY for June 13, 2013

Today's Support and Resistance levels:

R3: 128.16

R2: 127.58

R1: 127.09

Current spot: 126.55

S1: 126.50

S2: 125.77

S3: 125.20

Technical overview:

With the rally to 129.34, the correction from 127.10 became slightly higher than we expected, but it did not change the larger picture in any way. Currently we are testing strong support at the neckline at 126.50, but it should just be a matter of time, before this support breaks and we see a continuation lower towards 125.77 and 125.20. Our ideal target for the ongoing wave 2 is at 118.73, where wave 2 will have corrected 38.2% of wave 1 and it is also where we find the bottom of wave iv of one lesser degree. In the short term we will find resistance at 127.09, which ideally will protect the upside, but it will take a break above 128.17 to invalidate our bearish call.

Trading recommendation:

We are short EUR from 130.75 and will move our stop lower to 128.25. If you are not short EUR already, then sell close to 127.09 or upon a break below 126.50 (one order done cancels the other) with the same stop.