The expected correction higher failed to rally through down channel resistance at 1.3100 but prices did (so far) hold our key retracement support zone between 1.2883/66. The possibility of a right-shoulder is still valid as prices remain above the proposed neckline, a break of 1.2866 diminishes the idea of a more complex top forming. (c1) S/t, the old 1.2965 level is expected to be important as upside resistance. Channel resistance resurfaces at 1.3075 with 1.3150 remaining an important determinant to a broader rally. A rally to 1.3059 can close the gap from Friday and would be the natural course as EUR has just completed a wave-4 correction and 5 wave decline. (c2) Levels: Support – 1.2883, 1.2866, 1.2662 Resistance – 1.2965, 1.3030, 1.3059
Nomura