Today's Support and Resistance Levels:
S1: 113.13 R1: 114.10
S2: 112.58 R2: 114.33
S3: 112.27 R3: 114.99
Technical Overview:
With a high at 114.69 wave iii of 3 might be over just shy of our ideal target area between 114.99 - 115.11. The decline from 114.69 has impulsive character (five wave decline), which tells us, that a zig-zag or a combination of corrections is under way. Therefore, we will be looking for a correction that is no less than 199 pips large. That would mean a correction which needs to break below 112.70. We think that the first possible target for this correction is at 112.27.That said we expect a minor rally up to 114.10 in the short term before the next decline down to our target at 112.27. Once this wave iv of 3 correction is over, we should see the next powerful rally higher towards 117.36.
Trading Recommendation:
Our stop at 113.35 was hit and we took a nice profit on our longs from 106.75. We do not particularly like to trade fourth wave as it can be rather unpredictable. If you are an aggressive day-trader you could sell EUR near 114.10 with a stop at 114.75 and take profit at 112.50.