EUR/JPY failed to move below 120.75 and instead broke above minor resistance at 121.97 indicating a low. This means that that the decline from 123.18 most likely was the c-leg of an expanded flat correction as wave ii and wave iii could now be developing. We still need a break above the 123.18 peak to confirm that the wave iii is developing but if such break is seen, we should look for a strong impulsive rally in wave iii that ultimately should take us above 127.50.
Support is now seen at 120.92.
We are long EUR from 121.98 with our stop placed at 120.85.
The material has been provided by InstaForex Company – www.instaforex.com