The rally out of the downward sloping bull flag was unimpressive. Still the range since mid-April is inconclusive because there is no confirmed trend change. To recap the reasons for expected weakness, there was a bull trap above 1.3138 as well as a bearish engulfing/tweezers candle pattern. We also noted that the rally from 1.2746 was a corrective a-b-c. The analysis is still valid but awaiting confirmation. (c1) S/t, a 3rd lower low is needed to follow consecutive lower highs. The breakdown level to watch in the near-term is 1.2983; below that level suggests that a strong Wave 3 sell-off will develop. Upside can be contained by 1.3048 & 1.3084 . The downside target zone is 1.2894/1.2770. (c2) Levels: Support – 1.2989/74, 1.2955, 1.2894 Resistance – 1.3048, 1.3084, 1.3138.
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