FX.co ★ Elliott wave analysis of EUR/JPY for August 7, 2014

Today's support and resistance levels:

R3: 137.35

R2: 137.25

R1: 137.15

Current spot: 136.71

S1: 136.61

S2: 136.45

S3: 136.16

Technical summary:

The expected decline to 135.49 is unfolding as expected and we should now see minor resistance at 137.15 to protect the upside for a break below 136.61 and, more importantly, below 136.15 for the final decline to 135.49 to end wave iii and set up a correction in wave iv to just below 138.00.

As we get closer to the ideal target near 135.49, the volatility will rise and the short-term swing will seem more eratic. This is because the battle between the bulls and bears become stronger even as we close in on a longer-term important low.

Trading recommendation:

We are short in EUR from 138.00 and will move our stop lower to 137.15. If you are not short in EUR yet, then sell near 137.11 with the same stop at 137.15.