The 5-wave decline from 1.3140 has yet to signal a reversal higher. A hammer/doji today would confirm the pattern (one is in the process of forming). This Wave-C can complete a larger A-B-C pattern that has been correcting the rally from 1.20 to 1.32. Major resistance on the way to completing the rally from July is the broken H&S neckline at 1.2883. S/t, we still consider Wave-5 of C a bullish, falling wedge as we posited Friday; broken resistance this morning is a first sign of further gains. This is the second time in 3 trading days that Euro has bounced off the 150dma (an important trend as it capped prices between February and May). Next resistance is a downtrend at 1.2750 followed by Friday’s pivot high at 1.2790. Long stops can now be moved to 1.2662 lows. Levels: Support – 1.2695, 1.2662, 1.2626 Resistance – 1.2750, 1.2790, 1.2883
NOMURA