FX.co ★ EUR/JPY Pushing Lower - Analysis for July 13, 2012

EUR/JPY Elliott Wave
This week the EUR/JPY pair was trading in a downward channel developing impulsive wave 5 (coloured blue) of the bigger wave (3) (coloured green). Yesterday, during the European session, we could observe a descending movement towards the 96.40 level. Therefore, during the New York session, this currency pair did not manage to hold this level and the price started pushing higher. At the moment, the EUR/JPY pair is trading around 96.70 level, and we are expecting to see the price at 96.05 today. In accordance with our wave rules and taking into account that the wave 3 retraces 161.8% of the wave 1, we can define the potential targets with Fibonacci extensions (101.60-98.30-101.40) with Take Profit at 96.05 (161.8% of wave 1). Resistance point at 97.00 can be used as Stop Loss point. Also it is necessary to monitor the EU Italian 10-y Bond Auction data that can change the rate of the pair.
Support and Resistance Levels
(S3) 95.57 (S2) 96.13 (S1) 96.47 (PP) 97.02 (R1) 97.58 (R2) 97.92 (R3) 98.47
Trading Forecast
Proceeding from Elliott Wave rules this week, the trend is expected to begin the downward movement. That is why short positions at level 96.60 with Stop Loss at 97.00 and Take Profit at 96.05 are recommended.