FX.co ★ Elliott Wave analysis of EUR/JPY for August 20, 2013

Today's Support and Resistance levels:

R3: 131.04

R2: 130.50

R1: 130.24

Current Spot: 130.20

S1: 130.08

S2: 129.87

S3: 129.42

Technical summary:

Even though we saw a rally past resistance at 130.72 yesterday, the high came in early at 131.04 in what looked like a expanded ending diagonal, because of the early high and the expanded ending diagonal, we will keep the above as our primary count. That said we still have two Alternate counts (see below) tailing just behind and the odds are almost equal between them. For the above scenario we will ideally see a decline towards support at 129.87 followed by a correction towards 130.50, maybe slightly higher towards 130.69 before the next powerful (impulsive) decline breaks below 129.87 for a continuation down towards 128.84.

However, the risk is a direct break above 130.50 and more importantly a break above 131.04, which would call for a continuation higher towards 132.00 and will make the triangle count the new preferred count.

Trading recommendation:

The stop at 1307.75 was hit for a small loss. Wait for the picture to clear before engaging any new postion.