Today's support and resistance levels:
S1: 127.55 R1: 128.06
S2: 126.66 R2: 125.51
S3: 126.04 R3: 129.32
Technical overview:
The wave iv of 5 correction we were expecting has worked out nicely. We have already seen a small break below 127.70 with a low at 127.55, so the absolute minimum correction is fulfilled, but will we see more downside pressure? We do not expect much more downside pressure from here, instead we expect a rally to set in soon for a move higher towards the 130.07-130.34 area in wave b of a possible triangle. We have no evidence that a triangle might be building, but we think it is a qualified guess, as we expect a complex correction in wave iv of 5 and a triangle will fit nicely into that expectation. It is also important to mention, that we should not see a break below the wave i of 5 high at 126.04 at any time, as that would leave us with an overlap between wave i and iv, which is not allowed under the Elliott Wave Principle if an impulsive move is unfolding.
Trading recommendation:
Our take profit level at 128.50 has been hit for a nice quick profit. We will again look for a EUR opportunity. We will buy EUR at 127.50 or upon a break above 128.00 with a stop at 126.00.
