Aussie suffered a deeper than expected wave-ii correction but the up move failed at the underside of the recently broken channel, notes Nomura.
"A modest target for wave-iii is symmetry at .9281 a more common target for wave-iii is the 1.618 extension which projects a move to .9172," Nomura projects.
"We expect a resolution to the low end of the Apr/June range where major support surfaces at .9210," Nomura adds.
In USD/JPY, Nomura argues that if we break below 101.24, there is a strong case for the bearish options.
"The bearish options, below 101.24 and definitely below 100.82, represent the view that this entire range from February was a bearish correction of the decline from 105 – 101 in January. This was not our base case but b/l 100.82, negates our bull triangle," Nomura clarifies.
"S/t, the rally from 101.45 failed right at the 50% retrace level only to suffer another sharp decline. The sell-offs from 102.27 and 101.86 are unfolding impulsively and a break of 101.24 clears a path for a test of 100.82," Nomura adds. 