By breaking below support at 128.60 and more complex correction is developing in EUR/JPY. Because of the deep decline in, what is now counted as red wave (w) we switch our count to call for a complete red wave (2) with the test of 128.30, but the break below 128.60 told us that the correction in red wave (2) still was ongoing and should move closer to the 127.44 - 127.60 area, with the possibility of a dip even lower to 126.96 before completing red wave (2).
From 127.60 or upon a break above short-term important resistance at 129.98 and new impulsive rally will be expected in red wave (3) towards 137.50, where red wave (3) will be a 161.8% extension of red wave (1).
R3: 129.98
R2: 129.27
R1: 128.98
Pivot: 128.68
S1: 128.19
S2: 127.59
S3: 126.96
Trading recommendation: Our stop at 128.50 was hit for a 60 pip loss. We will re-buy EUR at 127.75 or upon a break above 129.98.
