Today's Support and Resistance Levels:
S1: 100.95 R1: 101.49
S2: 100.63 R2: 101.75
S3: 100.13 R3: 102.11
Technical Overview:
The break below 100.93 was somewhat unexpected, but it was most likely the clue to us that the correction from the 103.85 high still is ongoing and that it will turn into something much more complex. Even though we broke below the bottom of wave a, we still think that we will soon see a new rally higher i wave b towards the start of the wave a near 103.85. We are now in the most unpredictably phase of this correction. Therefore, it will likely be pure guess and we will be lucky if we get the shape right.
We knew, that we should be looking at a shallow but complex correction from 103.85 because this correction should alternate from wave 2, which was a simple and deep correction. Just looking at wave a, we cam suggest that it looks like a simple correction and not something complex, but with the break below the bottom of wave a, it does begin to take the shape of something much more complex. In short-term, we will be looking for a break above 101.46 to confirm that a new rally higher towards 102.11 and a confirmed break above here does call for a rally towards the start of wave a at 103.85. However, as long as minor resistance at 101.46 protect the upside, there is a risk of a deeper decline towards 100.13.
Trading Recommendation:
We gave back some of our profit as the stop at 100.90 was taken out. We will trade this correction much more carefully from here as the correction has become much more complex. However, we will buy EUR at 101.50 with a 100.80 stop and take profit at 103.50.
