FX.co ★ EUR/JPY Elliott wave analysis for August 6, 2013

Today's support and resistance levels:

R3: 130.79

R2: 130.40

R1: 130.25

Current spot: 129.89

S1: 129.79

S2: 129.32

S1: 128.89

Technical summary:

The decline from 131.98 broke through strong support at 130.40 without any trouble, and we are now looking for minor resistance at 130.25 or maybe resistance at 130.40 to protect the upside for the next part of the decline towards 128.89. However, the target for this decline lies at 126.89, where blue wave iii will be 1.618 times longer than blue wave i. In the longer term, we are looking for a decline to strong support at 124.96 in a flat correction from the 133.81 high.

Trading recommendation:

We short EUR from 129.55 and will move our stop lower to 131.25. If you do not have short positions on EUR yet, then sell close to 130.25 with the same stop at 131.25.