EUR/JPY - 4 Hourly
The corrective rally from 129.20 extended to test the 50% corrective target at 131.27 (the high was seen at 131.37). The following decline does look constructive, but it is not yet in five waves. To confirm a five wave decline, EUR/JPY need to stay below minor resistance at 131.13 and break below minor support at 130.73 for a decline closer to support at 130.61. This should complete the first impulsive decline from 131.27 and confirm that the correction in wave iv is completed and wave v lower is developing.
If minor resistance at 131.13 is broken, without a new low being seen first, that will indicate that the wave iv still has more upside to cover and will target resistance at 131.76.
R3: 131.76
R2: 131.37
R1: 131.00
Pivot: 130.85
S1: 130.73
S2: 130.61
S3: 130.43
Trading recommendation:
Our stop at 131.25 was hit for a small loss of 62 pips. We will sell EUR here at 130.96 and place our stop at 131.22. We will take profit at 130.70 and be ready to re-sell EUR near 131.00.
