FX.co ★ Elliott wave analysis of EUR/JPY for October 2 - 2014

Today's support and resistance levels:

R3: 137.89

R2: 137.72

R1: 137.47

Current spot: 137.41

S1: 137.38

S2: 137.25

S3: 136.96

Technical summary:

The correction in red wave ii just keeps moving lower. We are currently seeing a test of the magic 70.7% corrective target at 137.38, but as long as minor resistance at 137.72 protects the upside, we need to allow for a continuation lower to the 78.6% corrective target at 136.96 before red wave ii is over and red wave iii will be ready to take over. That said, we will need a break above 138.80 to confirm that red wave iii is indeed unfolding. We also need to remember, that second waves are allowed to correct 100% of the first wave, but never ever can break below the origin of the first wave. 

Trading recommedation:

We are still neutral and will move our EUR-buy order lower to 137.75.