Trade Idea: EUR/JPY - Buy At 120.90

EUR/JPY – 122.74

Recent wave: wave 2 is unfolding as a triple threes and should be limited to 118.40

Trend: Sideways

Original strategy

Buy at 120.90, Target: 122.90, Stop: 120.25

New trading strategy

Buy at 120.90, Target: 122.90, Stop: 120.25

Although euro rebounded after falling to 121.46 yesterday, above resistance at 123.90 is needed to revive our bullish count that wave v has ended at 119.66 earlier and bring retracement of recent decline to 125.00 and then 125.24, otherwise, further consolidation would take place and another retreat to 121.46 cannot be ruled out but support at 120.30 should remain intact, bring strong rebound later this week

Our latest preferred count is that the 3rd set of a-b-c of larger degree wave 2 is still in progress and only b leg ended at 134.37 (with a – 134.54, b – 127.32 and c – 134.37), hence c leg is now underway with minor wave i ended at 131.52, ii at 133.65, wave iii at 120.70 and wave iv at 125.24 and wave v has ended at 119.66 and gain to 124.50 is likely but above 125.24-28 (previous resistance and 38.2% Fibonacci retracement of 134.37-119.66) is needed to add credence to our bullish count, then headway towards 127.02 (50% Fibonacci retracement) would be seen

In view of the above analysis, we are still looking to buy euro on subsequent fall Below 120.30 support would abort and risk retest of 119.66.

On the daily chart, wave 2 from 139.26 which unfolded as a complex correction triple threes has ended at 126.95 with first set of a-b-c ended at 127.00, then x wave at 138.72, followed by second set of a-b-c at 129.02, then another x wave at 138.49 with the third set of a-b-c marked as: a-126.95, b-134.37 and the c leg should be limited to 118.40.

On the bigger picture, we are treating the rally to 169.97 as end of wave A, then followed by a selloff in wave B (abc-x-abc) at 112.08. The wave C from there should unfolding as an impulse with wave 1 of C ended at 139.26, then the 3-legged wave 2 should stay well above 120.00 and wave 3 should bring retest of 139.26, then towards 142.00 later this year.