Tuesday’s note highlighted the developing bear flag and support is now giving way to confirm further weakness. By bisecting the downtrend from 1.37 at its strongest move we reach a target of 1.2627; via symmetry, Wave (1) = Wave (5) at 1.2627. This is a high confidence target now but we do expect a stall at 1.2662, the November low. S/t, flag support is 1.2800 and yesterday’s low is 1.2783 so these remain the minor supports ahead of a quick move to 1.2751. The pattern within the bear flag can also be viewed as a head & shoulders top; the projection for this bearish continuation pattern is 1.2716. (240m chart) Levels: Support – 1.2800, 1.2783, 1.2716 Resistance – 1.2864, 1.2890, 1.2940
Nomura