Today's Support and Resistance levels:

R3: 130.11

R2: 129.69

R1: 129.35

Current Spot: 129.05

S1: 128.70

S2: 128.44

S3: 128.10

Technical overview:

As we said yesterday, the price action that we saw Monday was not supportive for an imminent decline. Rather it did flash that one more rally towards 130.59 was needed and that is what we saw. With a high at 130.56 (just 3 small pips below our target), we have seen a turnaround to the downside again. Of the ongoing c-wave we have now seen wave i and ii. Wave ii was an expanded flat correction and after an expanded flat correction we should expect an extended impulsive wave to follow, which in this case means a decline to at least 126.57 and possibly lower. In short term we expect minor resistance at 129.35 will be able to protect the upside, but if we do see a break above 129.35 we are likely to see a continuation higher towards 129.61 before the next powerful decline is seen towards 126.57.

Trading recommendation:

Our break-even stop at 130.25 was hit. However, we sold EUR again at 130.50 and will move our stop lower to 130.60. If you are not short EUR already, then sell close to 129.61 with the same stop at 130.60.