FX.co ★ EUR/JPY Elliott wave analysis for August 5, 2013

Today's support and resistance levels:

R3: 131.98

R2: 131.79

R1: 131.55

Current Spot: 131.18

S1: 131.07

S2: 130.79

S3: 130.41

Technical summary:

It finally seems that blue wave ii has come to an end. In the short term, we are looking for resistance at 131.55 to protect the upside for a break below 131.07, which will confirm a continuation lower towards strong support at 130.40. However, if our count is correct, support at 130.40 would like seem like butter and prices would cut through it like a warm knife. In the long term, we are looking for a retest of strong support at 124.96 in a flat correction. We might fall even more, but for now let us concentrate on getting down to 124.96. The risk is a break above 131.55 which would make the decline from 131.98 look like a correction a call for a new test of this resistance.

Trading recommendation:

We short EUR from 129.55 with a stop at 132.80. Upon a break below 131.07, we will lower our stop to 132.00. If you do not have short positions on EUR already, then sell upon a break below 131.07, with the same stop at 132.00.