FX.co ★ Elliott Wave analysis of EUR/JPY for December 4, 2013

Today's Support and Resistance Levels:

R3: 139.83

R2: 139.62

R1: 139.54

Current Spot: 139.36

S1: 139.18

S2: 138.93

S1: 138.69

Technical Summary:

After some small stabs above the ideal target at 139.89 with a high at 140.02, we saw the expected decline and we also saw a short term break below important support at 138.97, but was it enough to confirm that we have seen an important top at 140.02? The decline from 140.02 does have some impulsive characteristics, which does support that an important top could be in place, but we do need more evidence to confirm the top. Short term we will ideally see a small rally to 139.54 before a break below 138.93 and more importantly a break below 138.69 confirms the impulsive decline for a continuation lower towards at least 138.31.

Only a break above 140.02 will invalidate the bearish count and indicate more short term stabbing to the upside, but we should not see much upside progress.

Trading Recommendation:

Stay short from 139.50 and move the stop lower to 140.05. If you are not short EUR yet, then sell a break below 138.93 with the same stop at 140.05.