The corrective decline from 0.8863 has been deeper than we first expected. However, second waves often are very deep. They may correct 99.99% of the first impulsive wave which we have counted the rally from 0.8675 to 0.8863.
We are looking for a break above the minor resistance-line currently at 0.8722 as the first good indication that wave ii/ has completed and wave iii/ is in motion for a clear break above 0.8863 towards at least 0.9063.
A break above resistance at 0.8740 will confirm that wave ii/ is completed.
Only an unexpected break back below 0.8675 will cancel off our former target at 0.8621 before a long-term low occurs.
R3: 0.8863
R2: 0.8779
R1: 0.8740
Pivot: 0.8724
S1: 0.8709
S2: 0.8675
S3: 0.8621
Trading recommendation:
We are long EUR from 0.8765 with our stop placed at 0.8670.
