FX.co ★ EUR/JPY - Elliott Wave Analysis for September 21 - 2012

Today's Support and Resistance Levels:

S1: 101.25 R1: 101.71

S2: 100.93 R2: 102.53

S3: 100.53 R3: 103.07

Technical Overview:

The correction from the 103.85 high (top of black wave 3) has now found support at the base mid-line channel. Even though this correction is in three waves, we only think that this was the first part of the correction and therefore, we need a wave b back close to where wave a began at 103.85 and then one final decline in wave c close to the bottom of wave a at 100.93.

Even though, the decline from 103.85 does look straight forward, it has actually been a double zig-zag combination and as we do expect a shallow but complex correction here in black wave 4, that is why we think that this was only the first wave in a more complex correction.

In short-term we will be looking for a minor set-back to the 101.17 - 101.25 area before the next push higher towards 102.27 and likely even 102.51, but ultimately we expect a move close to the top of black wave 3 at 103.85.

Trading Recommendation:

We booked a nice profit of 160 pips yesterday. We will now be looking to buy EUR again and will buy at 101.45 or upon a break above 101.67 (one order cancels the other). Place stop at 100.90 and take profit at 103.50.