Today's Support and Resistance levels:
R3: 131.00
R2: 130.71
R1: 130.57
Current spot: 130.42
S1: 130.19
S2: 129.93
S3: 129.46
Technical overview:
The rally of the 129.46 low became much higher than we expected, but even a test of 131.40 does not change the larger picture. We are still in a major wave 2 correction from 133.81 and the ideal target for this correction is at 118.73, where wave 2 will have corrected 38.2% of wave 1. The big question is how do we get done to 118.73? Corrections very seldom unfolds in a simple and easy way.
We think the best way to make this detour to 131.40 will be as a wave ii of C and if this count is correct we should expect acceleration towards the downside very soon and we will not like to stand on the sideline, while wave iii unfolds as this is where the best part of the decline shall be found. The minimum target for wave iii is at 128.80, but we think that an extension in wave iii will be more likely and that would call for a decline to 127.19 if not lower. In the short term we expect resistance at 130.71 to protect the upside.
Trading recommendation:
Our stop at 131.20 was taken out for a nice little profit, but we will sell EUR again at 130.65 or upon a break below 130.19 with a 131.45 stop.
