Last week’s update called for a move to and bounce off of the 1.0562 target and prices actually rallied from 1.0561! The bounce was short-lived and ushers 2 different scenarios that are equally probable in the near-term. First, prices are forming a wave-(2) correction targeting near 1.0500; this outlook will be promoted on a break of a small bear flag below 1.0573/1.0561. The second scenario calls for a wave-iv triangle that is consolidating recent gains ahead of a wave-v rally to near 1.0800; this analysis is negated with a move below 1.0561. For today watch the small range between 1.0573/1.0597; a break to the top side favors our call for a bullish triangle while a break through the lower bound targets 1.0500 to complete the correction. (240min)Levels: Support – 1.0573, 1.0561, 1.0507 Resistance – 1.0597, 1.0669, 1.0708
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Nomura