Today's Support and Resistance levels:
R3: 131.31
R2: 131.00
R1: 130.68
Current Spot: 130.45
S1: 129.91
S2: 129.20
S3: 128.48
Technical overview:
The x-wave ended a little higher (131.31) than the ideal 130.88, where it would have corrected 61.8% of the decline from 133.81 down to 126.11. Now we are looking for the second zig-zag lower towards the ideal wave 2 target at 118.73, where wave 2 will have corrected 38.2% of wave 1 and at the same time it is where we will find the bottom of wave iv, of one lesser degree. In the short term we expect resistance at 130.68 will protect the upside for a decline towards 129.20 where we will find the next strong support, but it should just be a matter of time before this support breaks and the decline towards 126.11 and 118.73 continues. That said, a break above 131.31 and, more importantly, a break above 131.47 would call for a full test of the top at 133.81 and maybe even higher in a much more complex wave 2 correction.
Trading recommendation:
We are short EUR from 130.75 with a stop at 131.50. If you are not short EUR already, then sell near 130.68 with the same stop.
