The minor rally from 121.29 does not follow the path of an impulsive wave and therefore must be corrective in character. This calls for another dip to below 121.29 in the near term and a move closer to 121.00, but a breakout below 120.94 can under no circumstance be allowed. As that will leave us with a three-wave rally from 120.74 and hence a move below here.
That said, we expect that support near 121.00 will be able to protect the downside for a breakout above 121.92 and, more importantly, above 122.54 confirming that the wave II has completed and the wave III is developing above 127.50.
R3: 122.54
R2: 122.24
R1: 121.92
Pivot: 121.60
S1: 121.40
S2: 121.19
S3: 121.00
Trading recommendation:
We are long EUR from 121.50 with our stop placed at 120.90
