Today's Support and Resistance levels:

R3: 1.6612

R2: 1.6582

R3: 1.6552

Current Spot: 1.6511

S1: 1.6477

S2: 1.6461

S3: 1.6427

Technical overview:

Yesterday we saw a break above resistance at 1.6638, but the break was not sustained and the following decline was deep. However, we are convinced that we have seen the low of wave ii at 1.6427 and it just is a matter of time before we will see the next powerful rally higher towards at least 1.6815 in the short term. In the long term we are looking for wave iii higher towards at least 1.7364 and possibly much higher. Wave ii has been an expanded flat correction and the impulsive rally to follow an expanded flat correction will likely be an extended rally itself. Therefore, a rally to minimum 1.7364, where wave iii will be 1.618 times longer than wave i, should be expected. At this point only a break below 1.6427 will force us to change our count, but the possibly downside should be limited to 1.6383 and just maybe 1.6338 before the next rally higher.

Trading recommendation:

We bought EUR at 1.6625 yesterday with a stop at 1.6420. If you are not long EUR yet, then buy here at 1.6511 with a low risk stop at 1.6420 or wait for a break above 1.6552 to confirm that wave iii is developing.