Today's Support and Resistance Levels:

S1: 1.5791                    R1: 159.02

S2: 1.5705                    R2: 1.5974

S3: 1.5592                    R3: 1.6053

Technical Overview: 

The base channel support line held on Friday and the break above 1.5802 indicates that wave 2 ended at 1.5578 and we should now look for the powerful wave 3 higher. The first target for wave 3 will where it equals wave 1 in length, which will be at 1.6513, but we will normally expect wave 3 to be the wave, that extends and therefore we would not be surprised to see wave 3 higher towards 170.91.

Even though we expect wave 2 to have finished at 1.5578 it could still turn into a more complex correction, if we do not break above 1.5902, but the odds for wave 2 to turn into a more complex correction is very low, so we will focus on the upside and a break above 1.5902 soon.

Trading Recommendation:

We bought EUR against JPY at 1.5805 and will place our stop at 1.5575. As soon as we get a chance to move our stop higher we will do that. If you have not bought EUR already you could buy a break above 1.5902 with the same stop.