The head & shoulders top outlined on Monday fell short of the 102.50/39 target zone but did see a break of key neckline support. The size, both in time & price, of the correction from 105.44 is the largest since October and implies that this sell-off is wave-(4) ahead of one more push higher. S/t, prices have rejected the pullback zone and recovered the neckline break at 103.90. These bullish developments contrast with an RSI position that has just created a double-top at the bearish 60 zone. Also the rally has retraced 61.8% of the a-b-c decline. Another break of 103.90/80 suggests that a complex correction is targeting the 38.2% retracement of wave-(3) and the w=y symmetry target between 102.21/101.88 Conviction: Medium Trade: Flat. Unattractive risk/reward, range expected Levels: Support – 103.90/80, 102.86, 102.21 Resistance – 104.45, 105.34, 105.44
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Nomura