FX.co ★ Elliott Wave analysis of EUR/JPY for September 25, 2013

Today's Support and Resistance levels:

R3: 134.00

R2: 133.56

R1: 133.10

Current Spot: 132.87

S1: 132.58

S2: 132.27

S1: 131.90

Technical summary:

As the correction from 134.95 continues to put pressure on the downside, the odd is shifting towards the rally from 129.60 being an expanded leading diagonal (see the chart below). At this point the odds for the two possible scenarios is fifty-fifty, but for the 1-2/1-2 scenario to be considered we have to find a bottom now for a powerful series of wave three's pushing higher towards 137.45. However, a break below 132.70 will shift the odds towards the expanding leading diagonal as wave i and wave ii developing for a move down to 132.12 and maybe even 131.63 before wave iii takes over for a rally higher towards at least 137.45.

Trading recommendation:

The stop at 132.90 has been hit for a small profit. Place a new EUR buy order at 131.80 or buy upon a break above 133.55 (one order done cancels the other). Place your stop at 129.25.