Today's support and resistance levels:

R3: 128.81

R2: 128.17

R1: 127.42

Current Spot: 126.67

S1: 126.22

S2: 125.50

S3: 124.96

Technical overview:

We are looking for a decline in wave 2 towards the ideal target at 118.73. Since the top of wave 1 at 133.81 we have seen a zigzag correction as wave-w interrupted by an x-wave and ideally we are in wave y down towards at least 123.75, where the ongoing wave y will be equal to wave w. That said we will have to consider an alternative count, in which the x-wave is not over yet. In this alternative count, the rally from 127.62 to 131.31 only was wave a of the x-wave. The decline from 131.31 to 124.95 was wave b of the x-wave and we are just entering wave c of the x-wave for a rally towards 132.51. If this count is to become our top count, we will need a break above 128.17. If however, resistance at 128.17 protects the upside for a break below 126.15 and, more importantly, below 124.96, then we can be sure, that the x-wave did end at 131.31 and wave y is ongoing for a decline towards 123.75 and possibly lower.

Trading recommendation:

We short EUR from 130.75 with a stop at 128.25, but we will also buy EUR here in the expectation of a rally to 132.51. If you do not have a position in this cross, then consider entering a short EUR position if 126.15 breaks with a stop+reversal at 128.25 or entering a long EUR position if 128.17 breaks with a stop at 126.00