We have been treating the rally to 1.3750 as the final leg of a wave-(2) correction. Now the Euro is again threatening to break the uptrend from July as the downtrend reengages. The choppy range trapped both bulls and bears and likely lightened positions and this is supportive of a move back to the 1.3550 area as part of a new wave-(3) decline. S/t, the overnight correction from 1.3629 has corrected 50% of the decline from the highs and failed at hourly pivot highs. A break of the 1.3629 lows can lead to a sharp decline right back to the old key pivot at 1.3580. For today look for a range between 1.3630/1.3686; a break of the former shifts our bias to 1.3580. Conviction: Med Trade: Flat. Look to be short post wave-2 correction of initial sell-off. Levels: Support – 1.3630, 1.3580, 1.3517 Resistance – 1.3686, 1.3717, 1.3750
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Nomura