Today's support and resistance levels:
R3: 1.6688
R2: 1.6600
R1: 1.6535
Current Spot: 1.6500
S1: 1.6445
S2: 1.6397
S3: 1.6356
Technical overview:
The rally of the 1.6225 low has been impulsive in character (in five waves), which is what we would expect after the triple correction down from 1.7111. In the short term, we would like to see support at 1.6445 protecting the downside for a break above 1.6600 and, way more important, a break above 1.6688, which confirms that a new rally towards 1.7111 is developing. However, if support at 1.6445 should break, it should only open up for a decline to 1.6397 and maybe towards 1.6356, before the next rally higher is expected. That said as long as the resistance line from the 1.7111 high has not been broken, we will have to consider the possibility of the decline from the 1.6688 high down to 1.6225 as being wave a of Z and the rally from 1.6225 as wave b of Z and if this is the case we need one last decline towards 1.6144 before the triple correction from 1.7111 finally find its low. This count is not our preferred count, but we must consider the possibility and be flexible.
Trading recommendation:
We long EUR from 1.6335 and will lift our stop to 1.6430. If you do not have long positions on EUR, then buy at a break above 1.6600 with the same stop at 1.6430.
