FX.co ★ EUR/JPY Wave Analysis for October 03,2012

EUR/JPY Elliott Wave
For the last few days the EUR/JPY pair was trading in an upward move, developing impulsive wave 1 (coloured blue) of the bigger wave (5) (coloured green). Yesterday, during the European and New York sessions, we could observe an ascending movement from 100.47 towards the 101.18 level and we can consider this move as the end of the wave (1) (coloured blue). Therefore, during the second half of the New York and today's Asian session, the EUR/JPY pair started pushing lower when the development of the corrective wave (2) started. At the moment, this currency pair is trading around 100.90 level and we are expecting to see the price around 100.30 soon .In accordance with our wave rules and taking into account that the wave 2 should retrace 61.8% of the wave 1, we can define the potential targets with Fibonacci Retracement (99.62-101.18), with Take Profit at 100.30 (61.8% of wave 1) . To reduce the risk, we can use resistance at 101.15 level as Stop Loss.Also it is necessary to monitor EUR German Bank Holiday, Retail Sales m/m, Final Services PMI, Italian Services PMI and Spanish Services PMI data that can change the rate of the pair
Support and Resistance
(S3) 100.14 (S2) 100.42 (S1) 100.59 (PP) 100.87 (R1) 101.15 (R2) 101.32 (R3) 101.60
Trading Forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the downward movement. That is why short positions at level 100.85 with Stop Loss 101.15 and Take Profit at 100.30 are recommended.