Since Augusts high, Aussie has been consolidating between 1.01-1.06 in choppy overlapping trade. Based on the large triangle that has formed since July 2011, we have argued that this consolidation is the final Wave E of the bullish coil. A resolution through the major 1.0600/625 resistance level can quickly take prices to recent highs a 1.09/11. (ch1) S/t, the latest A-B-C correction traced 5 legs down and failed to resolve lower after breaking support at 1.0386. This bullish reversal was accompanied by a momentum divergence as well. The key upside levels to confirm a trend change are the pivot high/low at 1.0486 and then the more critical high at 1.0599. (ch2) Levels: Support – 1.0386, 1.0365, 1.0329 Resistance – 1.0486, 1.0599, 1.0625
Nomura