Bias: I think we'll get a bounce - the uncertainty is whether this will occur directly or after one more dip…
We have an hourly bullish divergence here while 4-hour is oversold. I can't make up my mind whether we'll see a direct recovery or will need to see a dip to the 122.11-33 or even 121.66-88 areas before the recovery. Resistance is currently at 123.41 and while that caps the additional extension lower can be seen. If we see a move down to 121.66-88 first look for a bullish trade set up. Alternatively a direct break above 123.41 should see a retest of the 123.73-95 area. A move above this resistance zone would encourage follow-through to 124.54 and potentially the 125.06-23 highs.
19th March: Having seen yesterday's losses I have to be more cautious about expecting further highs… The 121.66-88 area must support and we'll need a break above 124.00 and then 125.06-23 to suggest potential for 125.73 at least and maximum 126.64-92.
If we do see losses today I don't think they'll be extensive. While 123.41 caps there is still chance of a move below 122.64-78 to extend to 122.11-23 at least and probably 121.66-88. However, I feel that should be the limit of today's downside. Thus, only below 121.45-60 would extend losses through 120.94 & 120.50 towards the 119.64-75 lows.
19th March: Losses seen and only below 121.45-60 would extend into the 120.20-70 congestion area ahead of the 119.64-75 lows.
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