FX.co ★ Elliott wave analysis of EUR/JPY for November 4, 2013

Today's Support and Resistance levels:

R3: 134.84

R2: 134.15

R1: 133.69

Current Spot: 132.85

S1: 132.60

S2: 132.44

S3: 132.20

Technical summary:

We are hoovering just above strong support in the 132.44-132.60 zone, which we expect will protect the downside for a break above 133.69 confirming the final rally higher in wave c of v to end the ending diagonal. The ideal target for wave c of v is at 137.69, but we could see a rally a little higher, but under no circumstances, it can break above 138.39, as that would make wave iii of v the shortest wave, and that is not allowed under the Elliott Wave Principle. Once wave v of the ending diagonal is in place, we should see a correction towards at least 124.85.

Trading recommendation:

Stay long in EUR from 133.20 and place your stop at 131.10. If you are not long in EUR, buy near 132.60 or upon a break above 133.69 with the same stop at 131.10 expecting to raise your stop soon.