03.05.201607:02 Forex Analysis & Reviews: Technical analysis of EUR/JPY for May 3, 2016

General overview for 03/05/2016:

The weekly pivot at the level of 122.97 has proven to be a tough nut to crack so far as the price was rejected two times already. Nevertheless, from the Elliott wave perspective the outlook is still the same: two counts are possible here. The main count indicates an (a)(b)(c) irregular flat corrective cycle with the (c) leg yet to unfold. The (b) leg of this cycle is currently completed with the bottom at the level of 121.68. The alternative count, however, indicates that the top for the big wave B is already in place at the level of 126.45 and since then the impulsive structure in big wave C started to develop to the downside. Wave 1 of this cycle is completed, and now the market should develop an internal corrective cycle to the upside, targeting the levels of 122.97 and if broken, 124.30. Please notice that the growing bullish divergence between the price and momentum oscillator supports both views at the time of writing.

Support/Resistance:

119.54 - WS1

121.68 - Intraday Support

122.32 - Intraday Support

122.97 - Weekly Pivot

122.95 - Intraday Resistance

124.30 - WR1

126.45 - Swing High

Trading recommendations:

The 122.32 level has been broken, but so far the bulls were too weak to push the price higher into the neutral zone. We still keep our trade open with SL below the level of 121.68 and TP at the level of 123.67.