Today's Support and Resistance Levels:
S1: 117.51 R1: 118.59
S2: 116.85 R2: 119.26
S3: 116.32 R3: 120.12
Technical Overview:
There was no time for even a minor setback yesterday. With the clear break above 115.55 we had the signal, that an important bottom was in place at 113.55 and the next rally higher had begun. Breaking above the former high at 115.99 was not difficult at all and even our next target at 117.90 was broken without any trouble. That is why we can conclude that this powerful rally has much more upside to cover. Therefore, we have changed our count to an even more bullish one. Instead of the 115.99 high being wave 3, it is more likely that it was only wave iii of 3 and wave iv of 3 ended at 113.55. Now we are heading higher in wave v of 3. The target for this wave v rally is at 119.50, where wave v will be 38.2% of length of the rally from the bottom of wave i to the top of wave iii. However, we could see a move higher towards the 50% target of the length of the rally from the bottom of wave i to the top of wave iii, which would take up to 121.34. This target would make sense as it will also represent an extension of wave 3 of 200% of wave 1. In the short term we could see a minor decline to 117.51 and maybe even down to 116.85, but from there the next rally higher towards 119.50 should be seen.
Trading Recommendation:
We are long EUR from 114.65 and will raise our stop to 116.00 and place our take profit at 121.15.
