EUR/JPY has failed to hold above minor support at 122.65 which is disappointing and opens the way for the continued downward movement to the 70.7% corrective target at 121.37 before the wave ii is completed. That said, we also have to be aware that all requirements to the decline from 127.50 has been fulfilled, so it should only be a matter of time before the wave ii is completed and the wave iii takes over for a new impulsive rally to above the 127.50 peak.
We will look for the bottom of the wave ii near 121.37 or upon a breakout above 123.74.
R3: 123.74
R2: 123.08
R1: 122.66
Pivot: 122.40
S1: 122.12
S2: 121.65
S3: 121.37
Trading recommendation: Our stop at 122.60 has been hit for a little profit of 35 pips. We will buy EUR again at 121.50 or upon a breakout above 123.08.
