FX.co ★ EUR/JPY Elliott Wave Analysis for August 24 - 2012

Today's Support and Resistance Levels:

S1: 98.26 R1: 99.02

S2: 98.07 R2: 99.18

S3: 97.80 R3: 99.37

Technical Overview:
It seems that red wave 4 became even shallower than we expected. We have most likely seen the end of red wave 4 at 98.08 and should ideally see a break above minor resistance at 99.02 soon for a move higher towards the red wave 5 and black wave 3, target at 99.72. Once we have ended red wave 5 and black wave 3, we should see a new shallow black wave 4. Due to Elliott's alternation principle, that says, that if wave 2 was a simple and deep correction, wave 2 should be shallow but complex in its structure.
At no point should we break below the top of red wave 1 at 97.80 before we have seen at least a new high above the top of red wave 3 at 99.18.

Trading Recommendation:
You should be long EUR against JPY from 95.85. Lift your stop from 97.45 to 97.75 which will give you a profit of 190 pips if triggered, which we do not expect.
If you are not long EUR already, you can buy here with the same stop and take profit at 99.50.