Bias: The wave structure is a little clouded but I favor a move to the 0.9377 target before reversing
In the end we did see a retest of the 0.9180 low but from there the rally has developed well and I feel that we should still see extension to the 0.9326-31 area first. I suspect the 0.9253 corrective low should support - at most 0.9226 - to provide the basis for the expected test of 0.9326-31. We should expect a pullback from that resistance but while it remains above the 0.9276 area (approx) I see the final rally meeting the 0.9377 target where I feel there is strong risk of reversal. However, do also note the other potential target at 0.9425. Watch for bearish divergences to form.
16th October: The rally has reached the 0.9269 resistance and if this breaks then note the 0.9305-30 resistance area and finally the maximum target area around 0.9381-0.9425 area.
I feel it will be best to wait for the test of the 0.9377 target (and possibly 0.9425) to establish any bearish positions. Only an earlier break below the 0.9226-53 area would concern and suggest a sooner reversal lower back to the 0.9180-84 lows and once these break we can expect continued losses through to 0.9112 and probably lower.
21st October: With the new high we should be considering the general 0.9377-0.9425 resistance for a potential reversal pattern. On the downside a break below 0.9166-80 would weaken the bullish structure considerably and suggest direct losses through 0.9112 and to 0.8983-0.9031.
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 now available on the Daily Forecast page of my web site.