Today's support and resistance levels:
S1: 119.14 R1: 119.60
S2: 118.73 R2: 120.18
S3: 118.33 R3: 120.86
Technical overview:
We are locked in an extremely tight rang presently, which should resolve in a powerful move once we see a breakout. We still believe that a small ending diagonal is developing and that would call for a break towards the upside. A break above the minor resistance at 120.18 will be the first indication that a bottom is in place, while a break above 120.86 will confirm the bottom for a rally higher to at least 124.50. If wave iii of 5 is developing, then resistance at 124.50 should not prove to be any obstacle at all, but if we see 124.50 holding, then we will shift our preferred count towards the triangle scenario. However, as long as resistance at 120.18 protects the upside, the risk is still towards the downside, but if our bullish count is correct, then at no point can a break below 118.73 be allowed. If support at 118.73 breaks, the wave 4 will still be developing and a continuation down to 117.05 will likely follow.
Trading recommendation:
We long EUR from 124.65 with a stop at 118.70. If you do not have long EUR positions already, then we recommend buying EUR upon a break above 120.86.
