Today's Support and Resistance levels:
S1: 1.5956 R1: 1.6000
S2: 1.5930 R2: 1.6054
S3: 1.5886 R3: 1.6101
Technical overview:
With the break above minor resistance at 1.5836, and more importantly the break above resistance at 1.5855 we knew that the expanded flat correction had finished already with the low at 1.5750 and that the blue wave iii higher had already begun. The first target for this blue wave iii is at 1.6054, but we expect this blue wave iii to extend, which calls for a continuation higher towards 1.6218 and, more likely, 1.6500 before blue wave iii is likely over. In the short term we can expect support at 1.5930, which will ideally protect the downside for the next rally higher towards 1.6054. However if we see a break below 1.5930 we must allow for a decline to 1.5904 before the next move higher. At no point should we see a decline below 1.5836 as that would leave us with no impulsive move up from 1.5750.
Trading recommendation:
We are long EUR from 1.5840 and will move our stop higher to 1.5830 leaving us with almost no risk. We will set our take profit level at 1.6450.