Bias: Overall bearish but the first move should be higher
Friday's break below 1.1252-80 provoked the long expected decline that has reached 1.1030 this morning. There is a chance this could move straight through lower but I am rather more in favor of a correction first. To confirm this we really need a move above the 1.1078 pivot resistance that should then spur us back to 1.1101. Take care there as this could provide a short correction but then look for follow-through above 1.1130 and into the 1.1150-86 resistance area which I expect will cap. Only breach extends to 1.1240-60.
11th May: Friday's break lower is in line with the medium term bearish expectations and while 1.1150-86 caps this should allow the downtrend to continue. Thus only above 1.1186-00 confuses and allows a pullback to 1.1320 at least.
The downside has developed at long last and there is still further to go. However, there is risk of a pullback to 1.1150-86 first which should provide a good selling opportunity for losses back to 1.1030 and after a correction to the 1.0912-25 area. Only an earlier break of 1.1030 would imply direct follow-through. There is minor support at 1.0980 but below that is the 1.0912-25 intermediate target.
30th April: The downside appears to be developing directly and while there is a risk of a pullback to the 1.1420-52 area I'll look for follow-through to the 1.1157 lows followed by 1.1061 at least and eventually the 1.0912 area.
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.