On Friday we argued in favor of a bullish falling wedge; that outlook has not changed and the momentum divergences on the hourly chart continue to be supportive. Now, the initial a-b-c (wave-w) decline is equal to the second a-b-c (wave-y) decline at 96.82. The 96.82 level is also an old pivot low so that will remain a key support going forward.
In order to raise the probability of this outlook we need to see a rally through wedge resistance and above the last pivot high at 97.50. The next major hurdle will be upper bull flag resistance at 98.25. The bears are still in control but the bulls have traced a bullish doji and bullish hammer on Thurs/Fri that are still awaiting confirmation. Levels: Support – 96.82, 95.81, 93.79 Resistance – 97.50, 97.90, 98.25
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Nomura