Bias: While 1.4372-89 caps the risk remains lower for 1.4264 and 1.4217 again
The rally fell a little short of the ideal 1.4496 target and this places the emphasis on the downside. Only a break above 1.4389-04 would suggest that we can once again retest the 1.4483-96 area and if that breaks then open up 1.4570-00 and max 1.4679. On the assumption that 1.4372-89 caps then I'll expect the decline to follow-through to 1.4264 initially but will expect a correction higher from here. The next buying area will then likely be close to the 1.4217 low...
4th January: I still favor waiting for 1.4014 at least and maximum 1.3820 before considering medium term long positions. Only an earlier move above 1.4680-00 would imply more immediate strength.
I would like to think that we're on our way lower - the only concern in my mind being the 2 week time frame expected to reach the expected low. For today as long as the 1.4372-89 area caps I feel we can see another attempt lower. From there a break below the 1.4334 low should extend losses to 1.4264. There is a good chance this will support for a pullback. However, expect it to later break and for a retest of the 1.4217 low... I doubt we'll get an aggressive push lower but note the next major support at 1.4123.
21st December: We're now very much closer to the final targets but there is no sign of reversal yet and we should be noting support at 1.4208-30, 1.4123 and 1.4014. This lower support looks attainable now - so perhaps I'll add 1.3820 as the deepest we should see.
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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.