EUR/JPY collapsed in overnight trading pushing way below the long-term target at 123.66. Did this collapse invalidate wave (E) of the long-term triangle consolidation? No it did not. To do that a break below support at 109.48 will be needed.
The deep decline of course raises doubt whether wave (E) already has completed or more downside pressure to below 118.82 should be expected? as wave C became a 161.8% extension of wave A we will count wave C and (E) as complete and will look for short-term corrective decline to 120.05 followed by a new impulsive rally above 122.26 to confirm a long-term low is in place.
R3: 123.18
R2: 122.26
R1: 121.60
Pivot: 121.28
S1: 120.90
S2: 120.58
S3: 120.05
Trading recommendation:
We are short EUR from 126.22 and we will lower our stop+revers to 122.50. We will take profit at 120.25.
The material has been provided by InstaForex Company - www.instaforex.com