Technical summary:
The 135.82 target is currently being tested. It is likely to mark the top of red wave iii and call for a correction in red wave iv to just above support at 133.08. As red wave ii was a simple zig-zag correction, a shallow but complex red wave iv should be expected before red wave v higher to 137.54.
In the short term, we expect minor support at 135.16 will protect the downside to test the ideal red wave iii target at 135.82. A break below 135.16 will be the first warning that red wave iii has peaked and red wave iv towards 133.08 is developing.
Trading recommendation:
We are long from 128.85 and will move our stop higher to 135.10. If our stop is hit, we will re-buy EUR at 133.15.
