FX.co ★ Elliott Wave analysis of EUR/JPY for September 24, 2013

Today's Support and Resistance levels:

R3: 134.24

R2: 133.92

R1: 133.57

Current Spot: 133.23

S1: 133.09

S2: 132.82

S3: 132.58

Technical summary:

The correction from 134.95 has been much deeper than expected and the break below the top of red wave i at 133.37 has forced a change of our count. We now have two almost equal likely possible counts. The first which we prefer slightly is shown on the chart above. There is a question whether that is a series of wave one and two has developed and it should just be a matter of time before we will see the series of powerful wave three higher towards at least 137.45 and possibly higher. The second count is that a leading diagonal has been building. This might call for a slightly deeper correction towards 132.79 and likely even 132.12 before we can expect the next rally higher.

In the short term a break above 133.56 and, more importantly, a break above 133.84 confirms the bottom and that the next powerful rally past 134.95 is developing.

Trading recommendation:

Stay long EUR from 132.60 and keep your stop at 132.90. If you are not long already, then buy EUR upon a break above 133.56 with the same stop at 132.90.