Bias: While 1.6323-28 holds a break above 1.6404 will trigger a final rally to 1.6539-76 else expect sharp losses
While we saw gains yesterday these stalled at the high end of the 1.6460-89 resistance and caused a pullback. It leaves things a little uncertain. Overall I still prefer to see one more rally but feel we do need to exercise caution. A break above 1.6391-04 will assist and extend gains above 1.6435 and back to the 1.6488 high. This may cause a brief reaction but overall I feel we should reach 1.6539 minimum with an outside chance of 1.6576-98. At all times be aware of any bearish reversal pattern that may develop.
16th October: Clearly this was a surprise but I feel the structure of the rally is corrective. It is difficult to be precise at this stage but I see broad resistance areas at 1.6374, 1.6457-67 and the 1.6531 & 1.6596. With luck we'll see the high at the same time at EURUSD...
I hadn't expected such deep losses to 1.6328 and it does cause me some uneasiness as hourly & 4-hour momentum are showing bearish divergences and we have reached the minimum level for a correction at 1.6488. However, wait for loss of 1.6323-28. If seen then it will open up the risk for a return to the 1.6240 swing low. I suspect this could support for a while. Once broken the downside could accelerate if we are seeing the general reversal elsewhere. Note the pivot support around 1.6120-25 also.
20th October: While the 1.6457-67 resistance should still be watched I still have a preference for a move as high as 1.6554-98 before this corrective rally finally stalls. Just be cautious in both areas. Only a drop below 1.6220-26 would signal a more direct reversal…
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