Today's Support and Resistance levels:
R3: 1.6565
R2: 1.6503
R1: 1.6450
Current Spot: 1.6392
S1: 1.6325
S2: 1.6264
S1: 1.6225
Technical summary:
This is exactly what makes correction difficult to handle. The second waves are allowed to correct all of the first wave, but it can never break below the starting point of the first wave. With a low at 1.6335 we have seen an almost 100% retracement of wave i. As long as support at 1.6325 protects the downside, I will be looking for a break above 1.6452 and more importantly a break above 1.6565 that will confirm that wave ii finally found its bottom and wave iii can take over for a very powerful rally. As you can see on the EWO indicator we now have the possibility of both a bullish hidden divergence and a normal bullish divergence and if these divergences is confirmed by the break above 1.6565 we should be looking for a very powerful rally higher. However, the risk is of a break below 1.6325, which shifts the picture to my alternate count and calls for a decline towards 1.6117 before we can expect a new move higher.
Trading recommendation:
Stay long with your stop placed at 1.6320. If you are not long in EUR yet, then buy after a break above 1.6565 with the same stop at 1.6320.
