Today's Support and Resistance levels:

R3: 1.6726

R2: 1.6685

R1: 1.6623

Current Spot: 1.6578

S1: 1.6531

S2: 1.6507

S3: 1.6488

Technical overview:

The rally from 1.6558 to 1.6685 was a minor five wave rally, but it was a c-wave rally of a minor expanding flat correction and not the first wave of an impulsive rally. That means that resistance at 1.6685 protected the upside for a break below the important low at 1.6558, which forced us to reconsider the rally of the 1.6225 low. Instead of having a 1-2; 1-2 count, we have placed wave i from 1.6225 to 1.6798 and wave ii most likely ended with Friday low at 1.6427 (just below the 61.8% of wave i) and we will now be looking for wave iii higher towards 1.7353, where wave iii will be 1.618 times longer than wave i. However, in the short term we need support at 1.6427 to protect the downside for a break above 1.6636, which would confirm that wave iii is developing. Only a break below 1.6427 will delay the upside for a decline closer to 1.6390 before higher again.

Trading recommendation:

Our stop at 1.6550 was taken out for a small loss. We are looking for a new EUR-buying opportunity and will buy EUR at 1.6540 or upon a break above 1.6624 with a stop at 1.6420.