The correction from 121.38 turned more complex and dipped into the 120.21-120.31 area - a little deeper than we first expected. This should complete wave ii and set the stage for a new strong rally towards at least 122.90 and likely even closer to 123.36 in wave iii.
Only an unexpected break below 120.02 will revive the larger wave II correction from 127.50, but the potential downside should remain very limited. We do not favor this scenario in any way, but it can not be excluded before resistance at 121.38 is broken.
R3: 121.38
R2: 121.18
R1: 120.87
Pivot: 120.54
S1: 120.31
S2: 120.21
S3: 120.02
Trading recommendation:
We are long EUR from 120.85 with our stop placed at 120.00
