Elliott wave analysis of EUR/JPY and EUR/NZD for February 5 - 2014

EUR/JPY

Today's Support and Resistance Levels:

R3: 137.93

R2: 137.65

R1: 137.18

Current Spot: 136.82

S1: 136.09

S2: 135.36

S3: 134.77

Technical Summary:

As expected we did see a correction from the 136.22 low. The expected correction could have terminated slightly before our second target at 137.65 (the top came in at 137.54). We are now ready for the next impulsive decline towards 135.36 and possibly even lower towards 134.77. At this point only a break above 137.18 prolongs the correction towards 137.65 and maybe even slightly higher towards 137.93 before the next downside pressure.

Looking at the longer term picture we are now getting close to the first major corrective target for the rally from 94.10 to 145.69, the 23.6% corrective target, which comes in at 133.52. I still think that the ideal corrective target is the 38.2% corrective target, which comes in at 125.99.

EUR/NZD

Today's Support and Resistance Levels:

R3: 1.6613

R2: 1.6547

R1: 1.6501

Current Spot: 1.6466

S1: 1.6426

S2: 1.6408

S3: 1.6395

Technical Summary:

With the break below support at 1.6469 (the top of wave i) I have been forced to adopted the alternate triangle count as my preferred count. This count show a major X-wave triangle, which ultimately will call for a break out of the triangle towards the upside. Short term I think that wave E ended at 1.6352 and will be looking for a break above 1.6500 as the first indication, while a break above resistance at 1.6603 confirms the bottom for a new rally towards 1.6787 and more importantly a break above resistance at 1.6996.

As long as minor resistance at 1.6500 protects the upside, opens the possibility for a slightly deeper correction towards 1.6408 and maybe even 1.6395 before higher again.