Bias: I look for gains to reach the 1.4166-90 area before the downtrend resumes
The 1.4020-38 support area worked well and this should see the correction I was looking for develop. Once above the 1.4142 corrective high it should follow-through to the 1.4166-90 retracement resistance. Ideally this should hold and trigger losses again. However, there is also an inverse head & shoulders that would target the 1.4250 area so take care with any attempt to sell. Thus, a break above 1.4190-00 would extend the pullback into the 1.4250-70 pivot area.
22nd January: Overall momentum remains bearish and we'll need a stronger reversal signal to confirm a break higher. The 1.4250-70 area seems important, then 1.4321-30 while above the 1.4413 corrective high would generate a rally back to the 1.4578 high.
The 1.4014-38 support was generated by a combination of measurements but at the moment it seems more likely that the recovery we are seeing is corrective only. Watch the 1.4166-90 resistance closely. If I have got the structure correct then this should cap and take price back to the 1.4028 low, see a small pullback and then extend lower. The eventual target looks to be in the 1.3890-1.3930 area.
22nd January: The strong bearish momentum is beginning to make a stronger bearish scenario more possible. However, at this point I feel the downside may well be limited to the 1.3890-1.3930 area approximately. Also keep in mind the deeper 1.3820 daily retracement target.
For access to my daily support & resistance levels please see the Daily Forecast page of my web site
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 along with a new report showing the prior day’s support & resistance levels.