Bias: I look for 1.5831 to be tested and for a correction back higher
I hadn't looked for the 1.6049 resistance to cap… but the fact that it did does appear to identify the pattern here. This should allow losses early today down to the 1.5831 area - at most the 1.5800-03 area again. Look for a bullish set up in this general support area. I shall then be looking for a recovery to take price back above 1.5880-00 and to the 1.5940-89 area. I feel this will hold but allow for 1.6006-20 also. Thus only above this higher resistance would imply a retest of yesterday's 1.6046 high and then on to 1.6075, 1.6125 and 1.6169 before a reversal lower.
7th October: Yesterday's cap at 1.6049 appears to suggest that we're not going to see it this high again for a while. Thus, only a break above 1.6006-1.6046 will resurrect the full retracement target at 1.6169.
Yesterday's peak at 1.6046 and decline has identified the strong potential for a much more bearish picture. In the short term however this should be limited to the 1.5831 (max 1.5800) area on the downside. Thus, only a break below 1.5800 would retest the 1.5769 low directly and probably just keep going for 1.5704, 1.5663 and 1.5638..
7th October: If we see the 1.5831 level support today and is then followed by a high around 1.5960-00 then I see this as a very bearish sign for losses that will quickly retest 1.5769 at least and probably directly below. In the MT this should then imply the lower 1.5256 target will be seen.
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.