Today's Support and Resistance levels:
R3: 1.6685
R2: 1.6633
R1: 1.6613
Current Spot: 1.6598
S1: 1.6590
S2: 1.6570
S3: 1.6558
Technical overview:
The minor road-map we laid out yesterday has pretty much described the price action. However, the decline from the top at 1.6685 (we expected a top at 1.6675) was deeper than our expected 1.6603 as we have seen a low at 1.6565. The rally from 1.6557 to 1.6685 was a five wave pattern and therefore we have counted it as the first minor wave of red wave iii higher towards 1.7248. If this count is correct, then we must allow for a 100% retracement of this minor wave one, but we cannot allow just a single pip below 1.5758 as that would force to adjust our present count. That said, we still expect support at 1.6565 to protect the downside for a break above minor resistance at 1.6633 and a break here will confirm the bottom for a rally back to 1.6685 and higher towards 1.6762 and 1.6817 on the way towards 1.7248.
Trading recommendation:
We bought EUR at 1.6610 with a stop at 1.6550. If you are not long EUR already, then buy a break above 1.6633 with the same stop at 1.6550.
