Today's Support and Resistance levels:
S1: 124.70 R1: 125.28
S2: 124.17 R2: 125.68
S3: 123.80 R3: 125.89
Technical overview:
Our invalidation point at 125.89 was tested on Friday, but it did not give away. So it is still an open question whether we have seen wave 4 ending a double zig-zag combination at 118.73 and wave 5 is developing or the current rally is the other x-wave, before we will see the third and last zig-zag combination down to 117.28. If we do break clearly above 125.89, the rally from 118.73 is wave i of 5 and we will soon see wave ii of 5 down to 122.33 before the next rally higher. However, if the invalidation point at 125.89 holds firm for a direct break below 123.80, the rally from 118.73 must be counted as an x-wave and we should then expect one last zig-zag combination down to the ideal correction target at 117.28, where wave 4 will have corrected 38.2% of wave 3.
Trading recommendation:
We are short EUR from 124.81 with a stop at 125.95. If you are not short EUR yet, then sell a break below 124.60 and, more importantly, sell a break below 123.80 with the same stop.
