Today's Support and Resistance Levels:
S1: 100.13 R1: 101.05
S2: 99.77 R2: 101.55
S3: 99.48 R3: 102.10
Technical Overview:
With a test of 100.16 yesterday, our 38.2% correction target of black wave 3 is completed, and we should turn our focus on the upside. However, we still need a break above 101.28 to ease the downside pressure and indicate that a bottom is in place for a new rally towards the top at 103.85. The correction from 103.85 met the price target, but later on it could be confounded. This requirement has not been fulfilled yet and that is why we think the decline from 103.85 to 100.16 was only wave a of a more complex correction. We think the decline from 103.85 has been a triple zig-zag combination, but from a time perspective we do not feel we are quite there.
In the short term, we would like to see a break above 100.80 and of course 101.28 in order to ease the downside pressure. Thus, as long as resistance at 101.28 protects the upside, we could see a slightly deeper correction, but we should be very close to a bottom now.
Trading recommendation:
You should be long EUR at 100.20 with a 99.48 stop. If you are not long already, you could play it safe waiting for the break above 101.28 before buying with the same stop.
