EUR/JPY has rallied nicely from the 124.89 low. The rally is now in five sub-waves (in red), which makes up the first impulsive wave in black wave i. Now we should look for a three wave corrective decline, which at least should take us lower to 127.29 and likely even closer to the 61.8% corrective target at 126.72.

Resistance is now seen at 129.38 and again at 129.69. The later will ideally be able to cap the upside for renewed downside pressure.

R3: 130.05

R2: 129.69

R1: 129.38

Pivot: 128.96

S1: 128.89

S2: 128.69

S3: 128.45

Trading recommendation:

We will sell EUR at 129.30 and place our stop at 129.80. We will place our take profit at 126.95. As we are trading a correction, this is a higher risk trade.