EUR/JPY dipped right into our target area between 122.14 - 122.50 (the low was seen at 122.49 and then the price turned around and started moving higher). This means wave ii could be complete and wave iii is developing, but we need confirmation that this is the case. Such confirmation will come in the form of a break above the minor resistance at 123.62 and more importantly a break above the resistance at 124.13. A clear break above the later will confirm wave iii is building for a rally to above 127.50.

As long as the resistance at 124.13 is able to cap the upside, we need to stay flexible and allow for another attack into the 122.14 - 122.51 target area before the low is caved out.

R3: 124.62

R2: 124.13

R1: 123.62

Pivot: 123.02

S1: 122.81

S2: 122.49

S3: 122.14

Trading recommendation:

We bought EUR at 122.51 and will place our stop at 124.51.