Today's Support and Resistance levels:
S1: 1.5356 R1: 1.5448
S2: 1.5307 R2: 1.5488
S3: 1.5248 R3: 1.5520
Technical overview:
The failure to sustain the break above 1.5577 confirmed that even a more complex correction was developing. The correction went from a flat correction into an expanded flat correction. In the short erm we are looking for one last decline within the 1.5328 - 1.5338 area from where wave iii is likely to take over an develop into an extended rally. When we see an expanded flat correction, we should expect the following impulsive move to extend, meaning that it would be longer than the first impulsive move, and in this case it is the rally from 1.5080 to 1.5577. That means that once wave ii is done, we can calculate the most likely ending point of wave iii. The first target we expect will be where wave iii is 1.618 times longer than wave i, which would call for a rally towards 1.6145 and possibly higher, but time will show.
Trading recommendation:
Our stop at 1.5480 was hit for a small loss, but we are looking for a new EUR-buying opportunity at 1.5350 or upon a break above 1.5422. We will place our stop at 1.5075, which is a bit far away, but we expect to be able to raise the stop higher pretty quick.
