This rally in Euro to 1.3140 is a sharp correction of the downtrend from 1.37 and has failed at old pivot highs. Longer-term, this peak fits as the top of the right shoulder in a head & shoulders top. The neckline of the topping pattern is near 1.2766, a break of which sets the stage for an even deeper decline. S/t, last week’s trade between 1.3050/1.3150 also resembles a head & shoulders top on a much smaller scale; the downside projection (post a break of 1.3037) targets a sell-off to 1.02935. Last week’s double-top at 1.3138 is now key resistance. For today we look for a break of 1.3037 to usher a continuation to the 4/4 break at 1.2878. Levels: Support – 1.3040, 1.2962, 1.2943 Resistance – 1.3096, 1.3126, 1.3138.
Nomura