Today's Support and Resistance Levels:
S1: 120.95 R1: 121.83
S2: 120.49 R2: 122.55
S3: 119.78 R3: 123.04
Technical Overview:
With the break above 121.36 we knew, that the triangle was a B-wave triangle and that we needed one more rally higher in wave c of X. As can be seen from the chart, a triple zig-zag combination is developing and it should just be a matter of time before we go back below 118.78. The reason for us to be so sure, is the B-wave triangle. Triangles can never be second waves and therefore the rally from 118.78 must be a corrective X-wave. That leaves us with the big question of how high will this X-wave go. Looking at the short structure, there is a very high possibility, that it finished already at 121.83, but we need a break below 120.95 and more importantly below 120.40 to confirm that. A break below 120.40 will call for a new decline down to 118.78 on the way to the ideal target at 117.28, where wave 4 will have corrected 38.2% of wave 3. However, as long as we have not seen a break below 120.95 and more importantly below 120.40 we must accept the possibility, that this X-wave could move higher towards 122.74 before the next move down.
Trading Recommendation:
Our stop at 121.45 was hit yesterday for a very nice profit. We will sell EUR again at 122.50 or upon a break below 120.95 (one order done cancels the other) we will place our stop at 124.00 and our take profit at 117.50.
