Today's Support and Resistance Levels:
S1: 106.60 R1: 107.10
S2: 106.35 R2: 107.25
S3: 105.86 R3: 107.50
Technical Overview:
The break below support at 106.93 was the clue to we needed to change our short-term count slightly. Instead of a wave i top at 107.13 we have moved the wave i top to 107.96. Now we see wave ii is developing. In the short term we should expect resistance at 107.10 will protect the upside for a break below 106.76, which confirms the next part of the decline towards the corrective wave ii target at 106.05, but we should not be surprised to see an even deeper correction towards the 105.03 - 105.28 area, before wave ii finds its termination point.
Despite our change in the short-term count that does not affect our long-term count, which still calls for much higher levels, we have to allow the market to correct itself from time to time. However, we should be aware that correction in wave 3 tends to be small and even sub-normal.
Trading Recommendation:
Our stop at 106.80 was taken out for a small profit. As we expect a slightly bigger correction we will try to ride, but without a very close stop. Therefore, we will sell EUR here at 106.97 with a stop at 107.55. Take profit is at 106.20. If our stop at 107.55 is hit we will place a new buy order at 107.90.