EUR/USD fell to new 2 year lows and flirted with the 1.23 line. It is probably awaiting the ECB decision for the next move.
What’s next? The team at Nomura sees two interesting lines aligning nicely:
Here is their view, courtesy of eFXnews:
The break of 1.2360 in EUR/USD means the downtrend has been reasserted and the 5-wave decline is not complete, notes Nomura.
This, according to Nomura, opens the way for 2 possible scenarios for this new leg down:
“The first Elliott option is that our wave-4 label was correct and now wave-(v) of 5 is still completing the final push lower to long-term trend support at 1.2260 (wedge support on this 4-hour chart is 1.2250),†Nomura projects.
“The alternate and more bearish option is that all the trading from early October was a bear triangle consolidation and a deep decline to 1.21/20 is just beginning,†Nomura adds.
Short-term, Nomura sees the next big support zone is 1.2260/50 where wedge support and a long-term uptrend align.
“Resistance is now 1.2360 and then 1.2420. 1.25 is a critical upside level to change the bearish trend and EW count,†Nomura argues.
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