The corrective rally we were looking for from the 125.12 low is unfolding nicely. The minimum target has already been fulfilled, but a final pop to 127.30 remains possible before the final push lower into the 124.59 - 125.12 zone. Ideally, this final push lower will complete just below 125.12, but under no circumstance can a break below 124.59 be allowed, as the break below here will force a recount for the decline from 137.50.

At this point, only a break above minor resistance at 128.65 will indicate that wave ii has completed, while a break above resistance at 129.46 will confirm that wave iii higher is developing.

R3: 127.30

R2: 127.06

R1: 126.61

Pivot: 126.39

S1: 125.98

S2: 125.78

S3: 125.46

Trading recommendation:

We are long EUR from 126.25 with our stop placed at 124.50. We wlll take half profit at 127.25 and then wait for an opportunity to re-buy EUR at 125.15.