The rally of the 117.65 low is quite impulsive indicating more upside pressure after a corrective decline towards 118.40. The next rally of the 118.40 corrective low is likely to push EUR/JPY above resistance at 120.67 and closer to 122.02 before the next consolidation. This will also mean a break above important resistance at 121.38 that will confirm a long-time low being in place.

In the short-term, a dip to 118.40 should be expected as long as minor resistance at 119.36 is able to cap the upside. From 118.40 or upon a direct break above 119.36 a rally to and above 120.67 look quite likely.

R3: 120.70

R2: 120.33

R1: 119.88

Pivot: 119.36

S1: 118.71

S2: 118.40

S3: 118.03

Trading recommendation:

We are long EUR from 118.92 with our stop placed at 118.30.