We still favor that wave c of ii completed at 126.68 and that wave iii higher to 136.90 is developing. That said, we can make a case for a deeper corrective decline in wave c closer to 126.79.

As long as support at 127.68 is able to protect the downside, we continue to look for a break above minor resistance at 128.11 and more importantly a break above resistance at 128.50 to confirm that a firm low was seen at 127.68.

If, however, support at 127.68 is broken, then an extended c-wave towards 126.79 should be expected to complete wave c and ii, before turning higher again in wave iii.

R3: 128.50

R2: 128.28

R1: 128.11

Pivot: 127.79

S1: 127.68

S2: 127.32

S3: 126.79

Trading recommendation:

We are long EUR from 129.50 with our stop placed at 127.60. If you are not long yet, then buy a break above 128.50 and use the same stop at 127.60.