The damage is done in the Euro now that prices have broken both the July up channel and key polarity zone at 1.3462. The current consolidation below old support is viewed as just a pause ahead of further weakness. Any strength is expected to find resistance at 1.3460/70. (240m) S/t, the rally from 1.33 is forming an a-b-c correction and the target zone for wave-c is between 1.3432/59, the area of the Nov 3 low and near-term Fibonacci resistance. The key takeaway is that the Euro has shifted trend and a new break of 1.33 will signal a resumption of the sharp sell-off that began late last month. (hourly) Levels: Support – 1.3359, 1.3318, 1.3296 Resistance – 1.3442, 1.3459, 1.3501.
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Nomura