Today's Support and Resistance levels:
S1: 120.35 R1: 120.85
S2: 120.20 R2: 121.18
S3: 119.74 R3: 121.88
Technical overview:
It seems that we finally have found a bottom of wave ii of 5; it is at 119.74. The rally of 119.74 clearly has impulsive character, which adds confidence to our scenario that wave iii of 5 higher has begun. In the short term we would like to see support at 120.35 protecting the downside for a rally above 120.85, which confirms the next rally higher towards at least 121.50 and preferable higher towards 123.90 in a powerful rally higher. Only a break below 119.74 will invalidate our bullish scenario and indicate that wave ii is still ongoing. Today we would like to introduce our alternate count, which reads that a wave 4 triangle is unfolding. If it is so, we will see a rally higher towards 124.50 in wave D and then the final decline in wave E towards 121.59 from where the trust out of triangle towards the upside is expected to take place. It should be noted, that no matter which of our counts is the correct one, the outcome will be the same, which is that one more rally above 127.70 is to be expected in wave 5.
Trading recommendation:
We are long EUR from 124.65 with a stop at 118.70. Upon a break above 120.85 we will move our stop higher to 119.70. If you are not long EUR already, then we recommend you buying a break above 120.85 with the same stop.
