Technical Outlook:

Points 107.70 and 106.60 are considered as downside targets. First target was defined yesterday; presently we can observe that the counter is pulling back / retracing and is set to resume downside movement. Resistance level is located between 108.00 and 108.60 as depicted on the chart below. Intermediary low/support is at 106.80. At the moment the counter trend rally is expected to begin below 108.60 levels. This fact can be considered as an opportunity to go short again.

Chart Setup and Trade Recommendation:

The counter has almost completed 5 waves down from its recent highs at 111.00 levels. It is natural that we can observe a counter rally here; it will probably be extended towards 108.60/80 level which is considered as current resistance  (previous support). These levels can be a entries for short positions  since EUR/JPY is expected to carve C there before the movement will has been resumed towards 106.60 and 105.70 lows. Please remember, that the market is still considered  as bearish from the structural point of view and EUR/JPY has the potential to tumble below 98.00 levels in coming weeks.

Trade Issued on April 04, 2012:

Sell @ 109.00, Stop can be moved @ 110.00, Target1 @ 106.60, Target2 @ 105.70. Fresh short entries should be taken at 108.50.

Wishing You,

Health, Happiness and Successful Trading.