Today's Support and Resistance Levels:
S1: 97.98 R1: 98.60
S2: 97.80 R2: 99.02
S3: 97.80 R3: 99.36
Technical Overview:
We failed to move above the resistance at 99.02 yesterday, which has made many scenarios possible. The first scenario is that we are still working on blue wave iv of red wave 5 and that it will end near 98.07 for one last rally higher towards the 99.12 - 99.36 area. If, however, we break below the bottom of blue wave ii at 97.98, the first scenario is invalidated and then the second scenario takes over. This scenario says that blue wave v of red wave 5 was a fifth failure which means that a new high was not seen. This is a sign of overall weakness, however, if we are in a new long-term uptrend from 94.09, a break below 97.33 can not be allowed before a new high above 99.12 is seen. In a short-term we should see strong support at 97.80, which is expected to protect the downside for the next rally above 99.12.
Trading Recommendation:
Our stop at 98.20 was taken out, which leaves us with a profit of 235 pips for the long EUR against JPY position we have from 95.85. We will re-buy EUR against JPY at 97.80 with a 97.30 stop
