We have been waiting for support to take hold above the 1.0925 Fibonacci retracement zone. This support level can mark the low for wave-(b) in a large sideways consolidation. As support takes hold we’ll look for a break of 1.0965 channel resistance to signal a much larger rally to the low 1.12’s; this rally can complete a larger wave-B within a choppy range. S/t, the decline from above 1.12 still looks clearly corrective but a rally through 1.0965 is needed to better both channel & pivot resistance. Now 1.0911/0905 is critical support. Momentum is also supportive of this outlook as successive new lows have not been able to push the RSI significantly below the 40 level; this is a hint that downside momentum is waning. Conviction: Medium/High Levels: Support – 1.0911/05, 1.0739, 1.0585 Resistance – 1.0965, 1.1026, 1.1091
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Nomura