We expect that short-term support near 122.11 will protect the downside for the next push higher towards 123.18 and 124.16.

As we predicted, wave II completed with the test of 120.75 and wave III higher towards at least 129.59 now is developing. At 129.59 the ongoing rally will be equal in length to the January to March rally from 118.72 to 127.50. However, a more likely target would be a 161.8% extension in wave III of wave I which calls for a rally to 135.02.

In the short-term, only an unexpected break below support at 121.62 will frustrate our bullish outlook.

R3: 123.75

R2: 123.18

R1: 122.81

Pivot: 122.38

S1: 122.18

S2: 121.85

S3: 121.62

Trading recommendation:

We are long EUR from 121.98 with our stop placed at 121.60