Bias: This seems to buck the trend and suggest a recovery to 0.8450-75 before lower…
Price refused to obey me… so… the only conclusion that seems logical to me is that while we are still seeing a corrective structure we require a little more recovery before the next downward leg. The current rally should move back to the 0.8356 high where a risk of a pullback is present. Once complete then a move to the 0.8403 area appears to be implied. I am slightly concerned considering my overall view, but this does seem to suggest extension to 0.8450-75... However, take care.
The upside would appear to require a de-linking from the general U.S. Dollar bullishness… To break this we shall need a break below this morning's 0.8274 low. If seen then look for follow-through to the 0.8230 corrective low at least. Breach would maintain losses for 0.8195-05, 0.8132-73 and then to retest the 0.8081 low.
Medium Term Outlook:
10th June: The depth of the pullback appears to break the immediate downward sequence and possibly suggests that we may be seeing a large triangle. It is early days but this would imply a peak around 0.8450-75.
Only back below 0.8230-74 would re-open the downside for 0.8081 and possibly lower - noting the 0.8014 support...
For a full description of how to use the analysis please see the Analysis page of my website. The prior day's set ups for potential trading levels highlighted in the report are available on the Daily Forecast page of my web site in the Trader Package review. ( 80 pips)