Bias: We should continue to see losses close to the 1.3805 low
Losses came right on cue and I really don't see much room for gains expect in a correction. There is resistance at the 1.4040 peak and I doubt it will get there - or if it does then not by much€¦ Thus wait for confirmation of any bullish move - the first being at the 1.4040 area but ensure that there is a bullish continuation pattern. If seen then watch resistance at 1.4085-95 and 1.4115. If all these break then may be we'll have to accept a stronger retest of the 1.4177 high. Also note resistance at 1.4212.
9th June: Above 1.4036 would confirm deeper gains to 1.4072 minimum and I suspect higher to 1.4134-60 and potentially 1.4212 but I doubt any higher than the 1.4267 corrective high.
Loss of 1.4050-88 provided the desired impact with losses down into the 1.3918-42 support area. I feel the correction from there is complete and thus the greater risk is directly lower. I doubt we'll get back to 1.4040 with the risk more bearish for loss of this morning's 1.3961 low to extend losses to 1.3935. This may well cause a modest pullback but not above 1.3980. This still needs to move directly lower to 1.3860-69 - another modest pullback before a final move to around the 1.3805 low. It can be 10-20 pips either side but we should then see a stronger pullback.
10th June: We should now see price stall & reverse (probably) in the 1.4134-1.4212 area although I can't strictly rule out a move close to the 1.4267 high. A break below 1.3965 & 1.3918 would bring us back closer to the next leg lower that should reach 1.3805, correct and then beyond.
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.
I shall be presenting a seminar in Hong Kong on Saturday 27th June at the Excelsior Hotel in Causeway Bay. Please see http://www.earlthorn.com/ for details.