Bias: We either found the top at 1.0691 or there will be one further extension to 1.0747-84
The rally developed but passed through the 1.0640-48 target to extend to 1.0491… I do see a valid target there too but I'm not sure that momentum is quite bearish enough to cause a reversal lower. While 1.0570-91 supports there is still room for one more rally that on a break above yesterday's 1.0691 high extend the rally to 1.0747 minimum and probably just above but no further than 1.0784-94... We should look for a bearish trade set up there.
27th January: The 1.0640-48 target was broken to reach 1.0691 and while it's a valid resistance we must also note that any break would extend the rally to the 1.0747-84 area. However, I feel that will be the highest we'll see…
The resistance points all broke to reach the higher projection at 1.0491 which I really didn't think would happen. Having reached this point we have to take care. There is a strong bearish divergence in the 4-hour chart and a weaker one in the hourly chart. Thus we may have to allow for one more extension into the 1.0747-84 area and if seen then I feel we should look for bearish trade set ups there. Only an earlier break below 1.0591 would extend losses to 1.0544. This lower support should hold on first test. This, only breach of 1.0544 would confirm stronger losses initially to the 1.0467 corrective low...
27th January: We either saw a high at 1.0691 and below 1.0544-91 will confirm or we'll see a last rally to 1.0747-84 before the cap develops.
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