FX.co ★ Elliott wave analysis of EUR/JPY for September 01, 2014

Today's support and resistance levels:

R3: 137.29

R2: 136.92

R1: 136.82

Current spot: 136.74

S1: 136.41

S2: 136.06

S3: 135.73

Technical summary:

Short-term important resistance at 137.29 has potected the upside, which keeps the sight locked firmly on the equality target between wave A and Wave C at 134.34. In the short run, we would like to see a break below minor support at 136.41 to confirm the next decline towards the long-term target at 134.34. That said, we have to be aware of the risk scenario, which shows a possible inverse S/H/S bottom. This formation needs a break above minor short-term resistance at 137.29. More importantly, it needs a break above the neckline resistance at 138.00 to confirm a rally towards 140.00 and evidently much higher.

Trading recommendation:

We are short in EUR from 137.75 with stop+reverse placed at 137.35. If you are not short in EUR yet, selling should be near 136.95 with the same stop+reverse at 137.35.