Bias: Mixed - watch for first breaks
Price reached its pullback target at 1.6326 and just a little further and thus I cannot rule out direct gains. However, with the target at 1.6743 which is nearly 300 pips higher we're going to need this to accelerate sharply. The first barrier is between 1.6486 & 1.6504 and once this breaks we should see test of the 1.6557 high. If this is to reach its target then there should be limited pullbacks and thus quick follow-through above 1.6636-62 and to the 1.6711-43 area. I feel this will cap so look for bearish reversal patterns.
21st July: I was too hasty in discarding the test of the 1.6535-73 resistance but now we're up here I still feel we'll find a cap for a pullback. Once that is complete we can then move to the 1.6743 high once again which I look to cap for a reversal lower.
Yesterday's downside target was achieved and now we need decide on whether price has completed the correction or whether it becomes more complex. While the downside is valid we really need the 1.6486-04 area to cap. A move below the 1.6425-33 support would trigger follow-through below 1.6375 and to the 1.6339 area. I look for this to support and prompt a reversal higher. Only breach would retest yesterday's 1.6310 low - breach would concern but allow 1.6265. Then note the next support at 1.6000-20.
23rd July: The 1.6321 retracement was met and thus I feel that while there is a risk that we'll see a triangle develop with a base at 1.6339, any move above 1.6486-05 would risk a direct move to 1.6711-43 where I feel we shall get another selling opportunity.
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