EUR/JPY has now touched the ideal target at 120.62 (the low has been seen at 120.51). This means our target has been more than fulfilled and wave II could terminate anytime now as a new impulsive rally in wave III could take over.
The first strong indication that wave II has completed and wave III is developing will be a break above 121.28. A break above here will call for a continuation towards 122.30 and 123.36 as the next hurdles.
That said, we need to accept the possibility of a little more downside as long as resistance at 121.28 is able to cap the upside, but the potential downside should be very limited.
R3: 121.84
R2: 121.53
R1: 121.28
Pivot: 120.76
S1: 120.51
S2: 120.32
S3: 120.00
Trading recommendation:
We are long EUR from 120.85
