Today's support and resistance levels:
R3: 1.6688
R2: 1.6611
R1: 1.6552
Current Spot: 1.6486
S1: 1.6452
S2: 1.6425
S1: 1.6390
Technical overview:
We still believe that the rally from 163.90 to 1.6688 was an impulsive wave i and the ongoing decline from 1.6688 is a wave ii. Second waves are allowed to correct 100% of the first wave, but it can never ever break below the start of the first wave with as much as a single pip. That means that we can go as low as 1.6390, but not below. That said, we are looking for one last decline below 1.6452 before this ongoing wave ii finally comes to a halt and wave iii higher takes over. As we said yesterday, there is a slim chance that this is an other x-wave, which would ultimately call for a break below 1.6390 for a continuation lower towards 1.6249, but that is not our preferred count and will only become the preferred count if we break below 1.6390.
Trading recommendation:
We are long EUR from 1.6395 with a stop at 1.6385. If you are not long EUR yet buying just below 1.6452 will be a low-risk buying opportunity with a stop at 1.6385.
