04.06.201308:53 Forex Analysis & Reviews: EUR/JPY Elliott Wave analysis for June 4, 2013

Today's support and resistance levels:

R3: 130.94

R2: 130.77

R1: 130.48

Current spot: 130.22

S1: 129.93

S2: 129.46

S3: 128.98

Technical overview:

We have seen the expected breakdown from the b-wave triangle and are now looking for a continuation down to at least 128.25, but we still think a more likely target will be close to 125.87 for wave c. However, that would not be enough to fullfill our wave 2 target at 118.73 so it is more likely than not, that the decline from 133.81 down to 125.87 only will be the first zigzag correction and that we will see at least one more or maybe even two more. That said, we should stay focused towards the downside and look for a break below 129.93 as the trigger for the next decline towards 128.25 and likely 125.87. Until we see the break below 129.93 we expect resistance at 130.48 will protect the upside.

Trading recommendation:

We short EUR from 131.92 and will move our stop lower to 131.20. If you do not have short positions on EUR already, then sell upon a break below 129.93 with the same stop.