FX.co ★ Elliott wave analysis of EUR/JPY for August 8, 2014

Today's support and resistance levels:

R3: 136.95

R2: 136.46

R1: 136.07

Current spot: 136.02

S1: 135.73

S2: 135.49

S3: 135.00

Technical summary:

Our target of 135.49 is now in sight. The decline from 138.00 has unfolded as a textbook impulsive wave. All we need now is a perfect test of the 135.49 target to end wave iii and set-up the stage for a correction in wave iv back to 138.00 (the top of wave four of a less degree is a very common target, especially when we are dealing with a wave doing self-correction).

In a short term, we will find minor resistance at 136.07, which ideally will protect the upside for the final decline to 135.49. But only a break above 136.46 will indicate that wave iv is developing.

Trading recommendation:

We are short in EUR from 138.00 and will move our stop + reverse down to 136.50 and we will place take profit+reverse at 135.65. Use the same targets to enter a small long EUR position.