Above 1.34 (the Wave (1) high) we continue to view this pullback in EUR as a Wave (4) correction and not a topping pattern. The correction did not complete after the sharp pullback to 1.3458 as first proposed; that was likely the first leg of an unfolding triangle. If this is a Wave (4) as we posited then a triangle fits and the sharp move from 1.37-1.3450 is a hallmark of unfolding coils. S/t, yesterday produced a second, choppy 3 wave move to 1.36 and from those highs another choppy move lower is underway to complete Wave c of the continuation pattern. The 2 important downside support levels are the 61.8% retrace & Wave-a low at 1.3458 and the critical 1.3400 breakout level from last month. Resistance is yesterday’s 1.36 high but we expect the series of lower highs and higher lows persist for the next 1-3 days. Levels: Support – 1.3458, 1.3418, 1.3400 Resistance – 1.36, 1.3650, 1.37110
Nomura