Price: 1.3908

Bias: Although there are signs of strong losses we have to be aware of the risk of a larger sideways move

Daily Bullish:

Yesterday's break above 1.4000 came as a surprise and alters the picture slightly, probably bringing it more into line with USDCHF. It could mean a directly bearish picture or we could be talking about a longer correction that could move back to 1.4049-76 once again. I also suspect that even in a correction we may just move below 1.3876... If so then the 1.3810-35 area becomes key and while it holds we can still see a move back above 1.3878 and pivot resistance at 1.3930 to recycle the correction all the way back up to around 1.4008 initially and after a correction to the 1.4049-76 resistance. I feel that will hold. Note next resistance is at 1.4092 and 1.4124. A direct break above 1.3930 from 1.3876 would also provide the same.

MT Bullish:

8th July: Yesterday's recovery to 1.4049 seems to change the balance of things but still, only above 1.4076 and 1.4124 would imply a closer retest of 1.42 again.

Daily Bearish:

I still retain a strong bearish preference and the recovery to 1.4049 yesterday appears to potentially bring this closer. However, I do feel we should take care in case we see the correction become more complex. Clearly 1.3876 is the next support and I feel that while there may be some consolidation above here initially it has a strong risk of breaking to extend losses to 1.3810-35. This appears to be important and only if it breaks would I begin to look for more direct and aggressive losses. If break is seen then look for 1.3725-47 initially - below opens risk for 1.3601.

MT Bearish:

8th July: Yesterday's recovery to 1.4049 was not really expected but actually suggests we'll see losses before too long. We still need to allow for a return to 1.4049-76 (even from 1.3810-35) and thus from there, or direct loss of 1.3810 the next targets are at 1.3601 and 1.3525€¦

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.