FX.co ★ Elliott Wave Analysis of EUR/JPY for October 16, 2013

Today's Support and Resistance levels:

R3: 133.83

R2: 133.63

R1: 133.33

Current Spot: 133.16

S1: 132.96

S2: 132.61

S1: 132.15 - 61.8% retracement of red wave i most likely target for red wave ii.

Technical summary:

With the early break below important support at 133.35, we knew that we had already ended red wave i at 133.83 and red wave ii was developing. In the short term, we expect resistance at the 133.32 - 133.37 zone to protect the upside for a break below 132.96, which confirms acceleration towards the ideal target for red wave ii at 132.15, before red wave iii takes over for a new impulsive rally higher. Only a direct break above 133.63 invalidates the expected downside and indicates, that wave iii is already developing for a rally higher towards at least 135.36 and more likely even higher to 137.04 if red wave iii extends.

Trading recommendation:

The stop at 133.33 was triggered for a small loss. Look to buy EUR at 132.25 or upon a break above 133.63 (one order cancels the other) with at stop at 131.15.