FX.co ★ EUR/JPY - Elliott Wave Analysis for October 10 - 2012

Today's Support and Resistance Levels:

S1: 100.35 R1: 100.81

S2: 99.81 R2: 101.44

S3: 99.63 R3: 101.84

Technical Overview:

The decline from 102.80 is bigger now. We do not have an overlap between what we used to count as blue wave i and the ongoing blue wave iv at 100.36, but even though they have not overlapped, we feel pretty sure that our previous impulsive count is invalidated and the correction from 103.85 is still ongoing. As we are in wave 4 and we are looking for a complex correction, the next best count is that a Triangle is developing. We have coloured the borders in red and as it can be seen, we have finished wave A and B and are currently in the very late stage of wave C. We could see wave C moving a little lower towards 100.17. This proves that at no point should we see wave C break below the starting point of wave B at 99.63 as that will invalidate the Triangle count.

Once we have seen wave C finished, we will be looking for wave D moving higher towards the 102.10 -102.30 area, from where we should expect the last leg of the Triangle (wave E) towards 101.10, which will finish both the triangle and wave 4 and set the stage for wave 5 higher.

Trading Recommendation:

Our profit stop at 100.70 was taken out and we will now re-buy EUR at 100.25 with a stop at 99.60 and take profit at 101.85.