Today's Support and Resistance Levels:

R3: 1.6829

R2: 1.6760

R1: 1.6709

Current Spot: 1.6668

S1: 1.6598

S2: 1.6528

S3: 1.6493

Technical summary:

The unexpected break above important resistance at 1.6499 is a total game changer here. The bearish picture we have been describing over the last month has worked pretty well until yesterday's break above 1.6499 this break is not consistent with the bearish count. We have been back to the drawing board looking for the best alternate count. The best count is that a new impulsive rally began at the 1.5914 low in early November. Wave 1 went from 1.5914 to 1.6996 and wave 2 went from 1.6996 down to 1.6214, which marked a 70.7% correction of wave 1. If this count is correct the wave 3 higher is in its very early parts. The minimum target for wave 3 will be at 1.7344, but we would not be surprised to see wave 3 extend higher towards 1.8013 in the longer term.

In the hort term we will be looking for resistance near 1.6690 for a correction towards support in the 1.6462-1.6493 area for the next rally higher towards strong resistance near 1.6920.

Trading recommendation:

The stop at 1.6505 was hit for a loss. We will buy EUR at 1.6475 with a stop at 1.6325.