A larger corrective wave from 1.2000 (Jul’11 low) may be unfolding in a multi-month triangle consolidation within a range of 1.3200 and 1.2300. The setback from 1.2970 (June high) could be a wave [D] which could test the 1.2350/1.2300 support. A break above 1.2645 would refocus on the 1.2835/1.2970 resistance in a wave (E). A close below 1.2280 however favours bears and retests the 1.2000 support initially.
The stabilisation attempt from the psychological support 1.2400, has broken the daily trendline resistance. A move above 1.2560 could test the tough 1.2605/1.2645 resistance. A reversal below 1.2460 would refocus on 1.2430/1.2400 ahead of the strong support zone around 1.2345/1.2300 where a medium-term bottom is likely to form. A close above 1.2645 confirms the medium-term trend reversal.
By Anantharajan .P, CMT (Technical Strategist, Precise Trader)