EUR/JPY Weekly

Now we are facing a very strong long-term resistance and we should be sensitive to any signs of a top building. For picking the top we will use a 4 hourly chart (see below). If our long-term scenario is correct we should ultimately see a break above this resistance for a much higher rally. The first target would be at 111.43, but in the long term we would be looking for a rally towards the top of wave B, which is at 139.19; it also marks the 61.8% corrective target of the entire decline from 168.94 to 94.10. However, we need to see the long-term resistance line broken before we can really get excited about the upside prospective.

EUR/JPY 4 Hourly

We are still looking for one more rally higher to the end of the first five wave sequence from 94.10. However, now it is likely to see some more consolidations before the last rally higher towards the ideal target at 104.71 starts. The consolidation from the 104.10 high has done the absolute minimum; it could be expected from the correction. Therefore, we should allow this correction to be little deeper or to be more sideways before we observe the last rally higher.

Trading Recommendation:

You should be long EUR from 102.85 with a stop at breakeven. Your take profit and move the position from long EUR to short EUR at 104.50.