Price:   89.92

Bias:    I feel the 90.62-96 area is going to be crucial

Daily Outlook:

Clearly yesterday was not anticipated… It does open up a larger downside risk should the 88.13-21 lows break. There are a variety of possible complications and therefore it may be better to sit out and observe. If the upside extends further then the 90.62-96 area looks critical to me and I feel it will probably hold. If so then a renewed attack on yesterday's 88.97 low would be expected and after a pullback we should be watching for a test of the 88.13-21 corrective lows. Breach extends losses to 87.51-74 and possibly 87.05 (max 86.76 - dependent on where this correction stalls.)

If we see direct losses then take care around the 88.45-65 area which could force the correction to recycle. Only directly above 91.00 would revert back to a more bullish structure but possibly still within range. There is pivot resistance around 91.53 and above there retracement resistance at 92.07 & 92.53 en route the 92.95-05 area.

Medium Term Outlook:

21st May:      The immediate bullish structure has been broken and maybe at risk of a larger reversal lower… However, wait for confirmation by a break of 88.13-21. Back above 91.00 would bring some stability back but possibly within a consolidation…

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 available on the Daily Forecast page of my web site in the Trader Package review. (+70 pips)