Prices have cleared the downtrend highlighted in Tuesday Morning Techs and supports the idea the bullish falling wedge is complete. This wedge break came after a double bottom reversal at 1.0814. The target for this move higher is near 1.1150. (daily) S/t, the rally is still contained within a channel so there is the threat that this move off the lows was a corrective a-b-c. Our favored outlook is that prices will break the topside of this up channel as wave-3 of (3) higher move towards 1.10/11. The recent 5-wave rally (1.0851-1.0942) produced a textbook channel and classic momentum divergence between waves-iii & v. The pullback target zone is 1.0907/0896 where the latter is the 50% Fib and previous 4th wave pivot low. Look for RSI to hold above 40 as wave-2 completes. (h) Conviction: Med/High Trade: Long at 1.0909, SL 1.0845, TP 1.1125 Levels: Support – 1.0907, 1.0896, 1.0876 Resistance – 1.0920, 1.0943, 1.0972
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Nomura