Due to the ECB rate cut, the price action was all over the place yesterday, but has it changed the overall picture? No! We saw the rally higher towards 130.00 (the top came in at 129.92) as wave d of the triangle and then we expected wave e lower towards 129.00. Yes, wave e has become deeper than we expected, but it has not broken important support at 127.05, which was the termination point of wave c. Only a break below 127.05 will indicate the top, for the entire rally from 94.10 is already in place at 131.12. That said, we still favor the triangle scenario calling for a thrust out of the triangle towards the upside, for one last rally higher towards 135.47. In the short term, we will be looking for a move above 128.43 and higher towards 129.00 and 129.92.
Trading recommendation:
We long EUR from 127.30 with a close stop at 127.00. If you do not have long EUR positions, then buy here or upon a break above 128.43 with the same stop.
The material has been provided by InstaForex Company – www.instaforex.com
Today’s support and resistance levels:
S1: 127.78 R1: 128.43
S2: 127.50 R2: 128.70
S3: 127.20 R3: 129.00
Technical overview:
Due to the ECB rate cut, the price action was all over the place yesterday, but has it changed the overall picture? No! We saw the rally higher towards 130.00 (the top came in at 129.92) as wave d of the triangle and then we expected wave e lower towards 129.00. Yes, wave e has become deeper than we expected, but it has not broken important support at 127.05, which was the termination point of wave c. Only a break below 127.05 will indicate the top, for the entire rally from 94.10 is already in place at 131.12. That said, we still favor the triangle scenario calling for a thrust out of the triangle towards the upside, for one last rally higher towards 135.47. In the short term, we will be looking for a move above 128.43 and higher towards 129.00 and 129.92.
Trading recommendation:
We long EUR from 127.30 with a close stop at 127.00. If you do not have long EUR positions, then buy here or upon a break above 128.43 with the same stop.
The material has been provided by InstaForex Company – www.instaforex.com
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