FX.co ★ Technical analysis of EUR/JPY for May 12, 2016

General overview for 12/05/2016:

The price reaction from the grey rectangular typical zone was promising and even the first impulsive wave might be labeled after the drop, but the market was to weak to break out below the important support at the level of 123.50. To confirm the reversal is true, the price must drop below the intraday support at the level of 123.50 and then below 123.23 technical support. Extension to the upside is possible only if the price breaks out above the local high at 124.40 in an impulsive fashion. Otherwise, lower prices are expected in this market, but the simple corrective structure might evolve into more complex and time-consuming cycle.

Support/Resistance:

120.33 - WS2

121.20 - WS1

122.36 - Weekly Pivot

123.23 - WR1

123.53 - Intraday Support

124.37 - WR2

124.66 - Intraday Resistance

125.25 - WR3

Trading recommendations:

Day traders should consider opening sell orders from the current market levels with a tight SL (10-15 pips) and TP open for now (might extend to around 120.33). Please use a tight SL because there are three different targets for the wave (b) to complete and at this stage of progression it is impossible to tell on which one the wave ends.