The single currency met resistance at 1.1201 early last year and eased throughout the rest of 2016, suggesting further consolidation below this level would be seen and test of 1.0622 support cannot be ruled out, however, reckon downside would be limited to 1.0450 and 1.0350-60 should hold, bring another rise later, above 1.0900 would bring test of 1.1001 resistance but only break of 1.1201 level is needed to signal the rise from 0.8426 low has resumed for retracement of early downtrend to 1.1350, then towards 1.1500 but reckon upside would be limited to 1.1700 and price should falter below 1.2000. Our latest preferred count that wave 5 has ended at 0.8426 and major correction has commenced from there, hence eventual gain towards previous 4th of a lesser degree at 1.2650 would be seen.
On the downside, whilst pullback to 1.0600 and 1.0500 cannot be ruled out, reckon downside would be limited to 1.0350-60 and support at 1.0235 should remain intact, bring another rebound later. In the event euro drops below said support at 1.0235, this would suggest first leg of correction from 0.8246 has ended as wave A, then wave B correction shall take place for weakness to 1.0000, however, downside should be limited to 0.9700 and reckon 0.9500 would hold from here, bring another rebound in late 2017.
