With the break below minor support at 124.33, it is clear that the rally from 122.34 has taken the shape of a leading diagonal, that completed with the test of 125.09 in wave i and wave ii is now in motion. The first corrective decline from 125.09 to 124.16 is in five waves indicating a zig-zag is in motion. After a minor rally to 124.73, we expect the second decline in wave c closer to the 50% corrective target at 123.71. Wave iv/ of one lessor degree completed at 123.80. Wave ii may well hit 123.71 - 123.80 wave ii to set the stage for the next impulsive rally higher to 127.02 and above.
R3: 124.73
R2: 124.62
R1: 124.51
Pivot: 124.47
S1: 124.29
S2: 124.04
S3: 123.80
Trading recommendation:
We have closed 50% of our long position from 123.10 at 124.35. We will re-buy EUR at 123.85 or upon a break above 125.09.
