Our view is that weak longs were flushed out after yesterday’s break of 99.01. We raised the concern aboutchannel resistance from July and thought a test of 99.01 would hold; the deeper than expected pullback worked tocomplete a large correction and there is still scope for another drop to 97.50/36 before stabilizing.S/t, support for today is 98.00 & 97.62 while initial resistance is at 98.26. We continue to view the mid-Octobermove to 99.01 as wave-(1) of a new uptrend towards 106. As long as prices hold above 96.57 that is still ourfavored interpretation. We did have to adjust the labeling for this corrective process but we would look to buy anymarginal weakness as wave-C of (2) completes.Levels: Support – 98.00, 97.62, 97.50/36 Resistance –98.26, 98.58, 99.01
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Nomura