Today's Support and Resistance Levels:
S1: 1.5710 R1: 1.5752
S2: 1.5699 R2: 1.5799
S3: 1.5678 R3: 1.5817
Technical Overview:
Since the rate had reached an important low at 1.4966 we saw wave 1 of a new long-term impulsive rally to 1.5905. The following wave 2 corrected 50% of wave 1 and was an Expanded Flat correction. Expanded flat corrections are often a first clue, that the next impulsive rally will be an extended wave. However, as we have not broken above resistance at 1.5836 we cannot be totally sure that wave 2 is indeed over yet, but odds support the idea that it is so. Our preferred scenario is that a series of waves one and two has taken place and that we should soon see a powerful rally above 1.5836 towards 1.6063 and likely even higher towards 1.6282. In the long term we expect this rally to carry us much higher towards to the 1.6917 - 1.6966 area.
In the short term we are looking for a minor correction towards 1.5699 before the next rally higher sets in.
Trading recommendation:
We want to be long EUR for the next big rally. Therefore, we will buy EUR at 1.5710 or a break above 1.5698 (one order cancels the other) with a 1.5650 stop loss.
