The corrective decline in red wave (2) seems to have bottomed just above the 50% corrective target at 127.60. The following rally looks nice and strong and has already tested short-term important resistance at 129.11. A clear break above this resistance will confirm that red wave (2) is complete and red wave (3) is taking over for a rally towards at least 136.50 and possibly even move higher.

Short-term, we expect support to be seen in the 128.33 - 128.47 area for the expected break above 129.11. That said, as long as resistance at 129.11 has not been broken clearly, we must accept the possibility of a final dip to just below 127.85, but the odds for this outcome, seems quite low.

R3: 130.49

R2: 129.98

R1: 129.11

Pivot: 128.94

S1: 128.76

S2: 128.47

S3: 128.33

Trading recommendation:

We have bought EUR at 129.11 and we will place our stop at 127.75. If you are not long EUR yet, then buy a possible correction back into the 128.33 - 128.47 area and use the same stop at 127.75.