Key resistance at 1.3160/72 failed to register a reversal yesterday and puts the bulls squarely in charge as EUR is clear of 3 major resistance levels now; the first is the d/t from 2011, second is the bull-flag resistance and third is a neckline connecting the pivot highs from mid-September . As long as prices remain above 1.3125 further gains are expected. S/t, the rally from the 12/7 lows at 1.2877 is clearly impulsive with little overlapping trade. Through 1.3190 suggests a test of channel resistance at 1.3241 with a scope for this next leg to take prices as high as 1.3305. Elliott analysis suggests this is a 3rd wave rally from 1.2877, the extensions and strong momentum shift are fitting. Levels: Support – 1.3156, 1.3144 1.3125 Resistance – 1.3190, 1.3241, 1.3305.
Nomura