FX.co ★ Elliott wave analysis of EUR/JPY for November 8, 2013

Today's Support and Resistance levels:

R3: 132.46

R2: 132.17

R1: 131.79

Current Spot: 131.58

S1: 131.20

S2: 130.88

S3: 130.55

Technical summary:

With the break below important support at 132.37, our bullish call for one last rally higher to 137.05 was invalidated and at the same time, it told us that wave v of 5 of I is already over and the wave II towards at least 125.74 is well under way. A decline to 125.74 would only correct 23.6% of wave I, which would be a sub-normal correction, but we can not rule out this possibility. However, a more normal correction would call for a decline towards the correction-zone between 118.70 and 119.70, where wave II would correct 38.2% of wave I.

In the short term we have seen a break below the base-channel, which indicates, that wave iii of A is developing. Wave iii is normally the strongest and most powerful wave and we should expect extension during this wave and an extension will call for a wave iii decline towards at least 128.58.

Trading recommendation:

Our stop at 132.30 was hit for a loss. We will be looking for a new selling opportunity and sell at 132.00 or after a break below 131.52 with a stop at 133.75.