Prices stalled after rallying to the underside of the broken uptrend and to the area of the previous consolidation. The sell-off is testing the bullish reversal pattern near 1.0865. To account for this we have changed our Elliott count to favor the alternate and that means price are in a wave-(4) correction which relates, proportionally, to last year’s wave-(2). Corrections are tough so from an Elliott perspective we outlined to strong possibilities. The reason we made the more bearish dollar count the base case is because it is supported by the classic techs as well; prices have broken trend and there is a possible head & shoulders top forming. S/t, we will favor the alternate (purple) outlook once/if prices hold above 1.0858 and then regain 1.0936. Otherwise we continue to see scope for a break of important support and a deeper flush towards 1.0725. Conviction: Med Levels: Support – 1.0868, 1.0858, 1.0725 Resistance – 1.0936, 1.0955, 1.1050
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Nomura