Let's start the new month by looking at the long-term chart. The weekly EUR/JPY chart shows the triangle consolidation, we have been tracking for a long time now. This triangle began way back in July 2008 giving us an almost 10 year triangle consolidation. The final leg in this triangle (wave (E)) began in late January with the peak at 137.50 and we have seen a nice three wave decline into the expected target-area between 123.08 - 125.32, which means wave (E) now could be complete and a new impulsive rally in wave [C] in its very early stages. If wave [C] becomes equal in length to wave [A] that will call for a rally to 200 in the years to come.
Short-term the rally of the 124.59 low look promising (impulsive). After a minor dip to into the 126.21 - 126.32 more upside towards 129.21 is expected, as the next minor target on the way higher.
R3: 128.88
R2: 128.53
R1: 127.72
Pivot: 127.10
S1: 126.78
S2: 126.31
S3: 125.78
Trading recommendation:
We are long EUR from 126.84 and we will keep our stop at 125.50.
