Today's Support and Resistance Levels:
S1: 107.34 R1: 106.67
S2: 107.01 R2: 108.33
S3: 106.87 R3: 108.89
Technical Overview:
The bullish and bearish scenarios we described on Friday are still valid. In the bearish case we will be in the B-wave of an expanded flat correction, which could make it to the 107.67 - 107.77 area before a powerful decline in wave C. As we already have tested the bottom of the target-area, there should not be much more room left towards the upside and we should be looking for a break below 106.87, and more importantly 106.20. A break below the later will confirm that the expanded flat correction beings the correct scenario.
The bullish scenario calls for a continuation of the underlying uptrend towards 108.33 and 108.89 as the next minor upside targets. It is important to note that we should not see a break below 106.20 at any time. It is also worth noticing that we have broken above the base channel resistance-line and this resistance-line begins to act as support. It is still a little early, but it is the kind of behavior we are looking for in wave 3 as we expect the wave 3 to extend. The first major target for wave 3 is at 110.87.
Trading Recommendation:
You should be long EUR from 106.20 and move stop up to break even. If you are not long EUR already you should buy close to 106.87 or a break above 107.67 with the same stop.
