FX.co ★ EUR/JPY - Elliott Wave Analysis for July 23 - 2012

EUR/JPY - Weekly

EUR/JPY - 4 Hour

Today's Support at Resistance Levels:

Support Resistance

1: 94.14 1: 94.75

2: 94.00 2: 95.24

3: 93.75 3: 95.64

Technical Overview:
First, looking at the long term picture, (the upper weekly chart) we can see, that we have now reached the end of the diagonal support line near 94.00 and we should expect this support line to protect the downside. As it is seen, we could be very close to the major bottom for the decline since the July 2007 high at 168.90. Therefore, we should begin to change our mind set from bearish to a more bullish one.
We have now reached the ideal long term target at 94.58 (pretty close to the ending of the diagonal support line near 94.00), and we should be looking for a bottom to form very soon. In short term we should allow a move that is slightly lower than the ideal 94.58 target. Looking at the internal wave relationship from wave 5 down from 101.62, we could see a move closer to 94.14 and maybe even 93.75. That indicates that we should expect a strong support in the 94.00 - 94.14 area to protect the downside, but must be flexible too.

Trading recommendation:
Our take profit in the 94.70 - 94.75 was hit in early Asian trading, and we could book a nice profit between 140 - 150 pips. As we should be very close to the bottom, we will be looking for a EUR-buying opportunity near 94.14 (buy at 94.20 with a 93.50 stop.