FX.co ★ Technical analysis of EUR/JPY for January 23, 2015

General overview for 22/01/2015 09:50 CET

Due to the breakout of level of 134.62 the main scenario has been invalidated and the alternative one is in play right now. There are two Elliott wave scenarios (main and alternative) available on weekly time frame charts:

-Main Scenario - Indicates a top for big wave 1 blue at the level of 145.72 and then complex corrective structure in wave A blue, then irregular flat corrective structure in wave B blue and now the last five wave impulsive decline in wave C blue that targets the level of 131.05.

-Alternative Scenario - This scenario indicates more downside wave progression after big wave 1 blue top at the level of 149.80. The corrective decline is sharp and sudden, so the zig-zag pattern is being expected here. This pattern has been partially done, but there is still plenty of room for the corrective cycle to the downside.

Please, notice that both of the scenarios still indicate that a bullish wave 3 blue will be developed when the corrective cycle in wave 2 blue is completed.

Support/Resistance:

149.80 - Swing High

140.19 - 50WMA

136.24 - 100WMA

131.05 - Projected Target Level

121.78 - 200WMA

119.13 - Extended Target Projection Level

Trading recommendations:

Swingtraders should now wait for the level of 131.05 to be tested and examine market behavior on that level before deciding to trade the wave B blue to the upside.