Today's support and resistance levels:
R3: 130.86
R2: 130.48
R1: 130.28
Current Spot: 129.89
S1: 129.64
S2: 129.17
S3: 128.83
Technical overview:
On Friday we saw a failure to break below important support at 128.65. The failure caused a new rally, but this rally is most likely the part of wave ii of iii of A lower. However, to confirm this count, we need to see resistance at 130.28 to protect the upside for a break below support at 129.64. A break below 129.64 will confirm that wave c of the expanded flat wave ii is over and that wave iii of iii of A is developing. After an expanded flat wave ii we should always expect an extended wave iii, which in this case means a decline to at least 127.81 and possibly lower. That said, as long as support has not been broken, the risk is a break above 130.28, which will change our count slightly, but only to wave i down from 131.12 to 128.65 and wave ii will be ongoing towards 130.39 before down in wave iii.
Trading recommendation:
We are short EUR from 130.25 with a stop at 130.25 (break-even). If our stop is hit we will sell EUR again at 130.30 with a stop at 131.25. If you are not short EUR yet, then sell a break below 129.64 with the same stop at 130.25.
