We keep harping on 1.3207 being an important level; it was a key pivot high in July and then a key pivot low in August. That level finally gave way last week but the Euro is threatening a retest after tracing a 5-wave decline from 1.3450-1.3105. Step-1 to confirming a bear trap is a close back through 1.3207 and then a rally through the wave-4 highs at 1.3223.
Bigger picture we are treating the trade from the 8/8 high as an expanded a-b-c flat. This implies that the whole structure is a correction and will lead to a resumption of the rally that spanned July. Levels: Support – 1.3160, 1.31, 1.2751 Resistance – 1.3207, 1.3223, 1.3298
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Nomura