EUR/JPY failed to break above 121.02 and started a new decline below 120.09. This was not our preferred outcome. It has only extended blue wave (ii) from a possible expanded flat to a more prolonged zig-zag correction. The ideal target for blue wave (ii) is seen at 119.88 from where a new rally is expected towards resistance in the 120.89 - 121.02 area. Once this level is overcome, it will go higher to 122.24 and 123.55.
R3: 121.02
R2: 120.89
R1: 120.42
Pivot: 120.24
S1: 119.88
S2: 119.78
S3: 119.67
Trading recommendation:
Our stop at 120.00 was hit for a 11 pips loss. We will re-buy EUR at 119.95 or upon a break above 120.24
