Today's Support and Resistance levels:

R3: 127.01

R2: 126.55

R1: 126.35

Current spot: 126.16

S1: 125.81

S2: 125.41

S3: 124.96

Technical overview:

Resistance at 128.17 protected the upside for a break below 126.16 which has open up the downside again for a new challenge of important support near 124.96. Once this support breaks we should see a powerful decline towards our target at 118.73, where wave 2 will have corrected 38.2% of wave 1. In the short term we could see a little more upside towards 126.55, but we should not see a break above 127.01 as that would indicate a new rally higher towards 128.29 before down again. However, a break below 125.81 and, more importantly, a break below indicates that the next real downside pressure has begun.

Trading recommendation:

We are short EUR from 130.75 and will move our stop lower to 127.10. If you are not short EUR already, then sell EUR close to 126.55 or upon a break below 125.81 (one order cancels the other) with a stop at 127.10.