Technical summary:

The correction from 128.80 has corrected 50% of red wave i. From a pure mathematical point of view, this is enough correction for red wave ii to set the stage for red wave iii moving higher towards 131.30. That said the decline to 127.42 could be just wave a of a flat correction. The current rally back to 128.80 wave b and then we still should see wave c below 127.42 before red wave iii is ready to take off.

Now, we have to wait and see whether resistance at 128.80 gets broken.

Trading recommendation:

We will buy EUR at 127.45 or upon a break above 128.80 (say at 128.85 and one order done cancels the other). Stop will be placed at 126.00