FX.co ★ Elliott Wave analysis of EUR/JPY for January 13, 2014

Today's Support and Resistance levels:В 

R3: 141.94

R2: 141.81

R1: 141.67

Current spot: 141.46

S1: 141.08

S2: 140.59

S3: 139.99

Technical summary:

We have seen a clear break below 142.04, which confirms that the powerful wave iii lower is developing. We will normally be looking for extension in wave iii; therefore, we will be looking for wave iii to be at least 1.618 times longer than wave i, which gives us a wave iii target at 136.43. Correction during wave iii tends to be small or even sub-normal. This is the wave we want to be trading as it is the one where we will normally gain the biggest reward.

In the short term we will be looking for resistance near 141.65 and strong resistance near 142.00.

Trading recommendation:

Stay short from 143.05 and move stop lower to 142.55. If you are not short inВ EUR yet, then sell near 141.65 with the same stop.В