24.02.201416:01 Forex Analysis & Reviews: Technical analysis of EUR/JPY for Febuary 24, 2014

General overview for 24/02/2014 13:30 CET

Starting from the weekly time frame there are two possibilities of further market movements as the main and alternative count. The main count still indicates a possible one more wave upside, with target above the level of 145.64. This scenario is valid as long as the level of 135.50 is not violated. On the other hand, alternative count indicates a possible top for wave 1 (alt: 1 labeling) at the level of 145.64. This would mean that the current wave progression is some kind of a correction in wave alt.2 of a higher degree. Another clue that supports this point of view is a bearish divergence on momentum oscillator and a possible overbalance of the price and time of the wave progression from wave B red low at the level of 93.30. Moreover, if we include 1st January to the chart data, there is a clear trend line on daily time frame chart that is acting now as dynamic resistance for the price. We can see on daily time frame the tight price range between 55MA, red resistance line at the level of 141.20 and the golden trend line resistance. It means the market is at the critical level on larger time frames and the next market move will be very important to the overall technical picture.

On lower time frames (H1 and H4) we can see that the price is moving within a rather tight golden channel and currently is oscillating around the weekly pivot at the level of 140.54. The hourly intraday time frame indicates a possible final push to the downside, which is possible completion of the abc purple correctiove structure in wave (ii) blue. Any breakout below the key intraday area at the level of 140.06 would expose the lower levels to be tested next: 139.83 and 139.33. Nevertheless the bullish count invalidation line lies a little bit lower at the level of 139.17 and only violation of this level would invalidate the impulsive count.

Support/Resistance:

138.40 - WS2

138.73 - 50%Fibo

139.17 - Blue impulsive count invalidation line

139.83 - WS1

140.06 - Key intraday level

140.30 - Intraday support

140.54 - Weekly pivot

141.02 - Intraday resistance

141.10 - 141.25 - Supply Zone

141.91 - WR1

Trading recommendations:

For daytraders: as long as the golden trend line provides dynamic support, the buy orders should be opened at the level of 140.06 with SL below the level of 139.83 and TP at the level of 141.25 with a possible further upside extension.

For swing traders: bullish biased traders please keep an eye on the level of 135.50 as a key level for the upside momentum to continue.