FX.co ★ EUR/JPY - Elliott Wave Analysis for October 5 - 2012

Today's Support and Resistance Levels:

S1: 101.18 R1: 102.56

S2: 101.46 R2: 102.97

S3: 101.00 R3: 103.85

Technical Overview:

Since yesterday we have seen the expected rally to resistance at 102.10 and as it is supposed this resistance tries to put up a decent fight, but it will not be for long. After a minor correction into the 101.49 - 101.68 area we should see the next part of the rally higher towards 102.53 and maybe even 103.57 before we should expect this wave iii to end. Once we have a top in place for this wave iii we should be looking for a shallow and complex correction in wave four. Due to R.N. Elliott's alternation principle wave two and four should be different in their look and because wave ii was a simple deep zigzag we should expect either a triangle or a combination of corrections in wave iv.

Trading Recommendation:

You should be long EUR from 100.20. Lift you stop to 100.70. If you are not long EUR already you could buy into a correction towards 101.49 - 101.68, but set a tighter stop at 101.35 as it will be a more risky buy up here.