Technical Outlook:
Structurally, EUR/JPY remains in a downtrend shown as Line of Resistance below. This line was broken earlier when the prices rallied from 97.00 to 111.00. The current situation shows that a huge retracement is underway; it can even be the beginning of a fresh downtrend. As one can see below, the measured levels for the retracement to end are 103.20 and 101.80 respectively. Resistances are well placed now at 107.50 and 111.00 respectively, where as Supports come in at 101.70 (S1), 99.20 S2) and 97.00 (S3). It is recommended to remain short.
Chart Setup:
The rally from 97.00 to 111.00 was in 5 waves. Retracement of this rally should take place in 3 waves down, and it looks like the 3rd wave resumed at 107.20 last Friday. This wave is projected to complete at 101.80 levels. The most probable count from here on should be towards 101.80 and we expect it to reach by the last week of April or in early May. 107.50 is the immediate resistance now.
Bottom Line: lower from here.
Trading Recommendation: Issued Yesterday
Sell @ 105.00, Stop @ 107.50, Target1 @ 103.20, Target2 @ 101,80.
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