Today's Support and Resistance levels:

R3: 130.56 (very important resistance)

R2: 130.13

R1: 129.70

Current spot: 129.32

S1: 128.92

S2: 128.49

S3: 128.00

Technical overview:

Even though the rally from 128.00 has been much bigger than expected, we are still looking for a break below 128.00 soon and an acceleration towards the downside. We counted the decline from 130.56 to 128.00 as red wave i of iii of c and the rally we have seen from 128.00 to 130.43 as red wave ii and we are therefore looking for red wave iii down. In short-term we would like to see minor resistance at 129.91 protecting the upside for a break below 128.98, which would confirm a new decline towards 128.00 and lower towards 126.57. However, it is vital that we don't see a break above important resistance at 130.56. If this resistance breaks, it will invalidate not only our bearish count, but it will also swing the entire picture towards a more bullish count and a rally back towards the high at 133.81 in a very complex correction.

Trading recommendation:

We are short EUR from 130.50 and will place a stop + reverse of our short position at 130.60. If you are not short EUR yet, then sell near 129.91 or upon a break below 128.98 with the same stop+reverse at 130.60.