Today's Support and Resistance Levels:
S1: 99.59 R1: 100.04
S2: 99.03 R2: 100.19
S3: 98.73 R3: 100.60
Technical Overview:
We finally moved away from the danger level at 97.80 and now are well above the resistance at 99.12 which confirms that red wave 5 of black wave 3 is unfolding. We are currently trading slightly above the first target for this red wave 5 at 99.59. The fact, that resistance at 99.59 did not turn down prices immediately but it is indicating that we could see a continuation higher towards the next target at 100.60 where red wave 5 will be 61.8% of the distance traveled from the bottom of red wave 1 to the top of red wave 3. These two targets are the most common targets for the fifth wave.
However, if the expanding ending diagonal is correct, we should not see red wave 5 to expand much higher than 100.04 before it finally tops out and a correction towards 98.80 and maybe even 98.02 is seen in black wave 4. If, however, we see a clear break above 100.04, it is more likely, that red wave 4 ended yesterday with the test of 97.98 and that we will see a full test of the 100.60 target.
Trading Recommendation:
As we are closing the top, we will stay neutral. However, buy EUR here with a low risk, stop at 99.55 and take profit at 100.50 still offers a decent risk/reward. However, if we get to 100.50, we will sell EUR against JPY with at stop at 101.10 and take profit at 99.05.
