A larger corrective wave from 1.1990 (Jul’11 low) may be unfolding in a multi-month flat wave within a range of 1.3200 and 1.2000. The setback from 1.2970 (June high) could be a wave (C) which could test the 1.2115/1.20000 support. A reversal above 1.2400/1.2560 would refocus on the 1.2970/1.3200 resistance in a wave [C]. A close below 1.2000 however extends the bear run deeper.
The bear trend has renewed from 1.2560 and the current sell off could be a fifth wave. A bounce attempt from 1.2175 is in force in the immediate term. The 1.2320/1.2375 resistance looks to cap strength now. A break below 1.2175 would aim for 1.2115 (Fibonacci target) ahead of strong support around 1.2000 where a stabilisation attempt may emerge. A reversal above 1.2400 however negates the bearish outlook.
By Anantharajan .P, CMT (Technical Strategist, Precise Trader)