Bias: I'd prefer a bullish scenario but wait for a break above 90.48-80 - until then there is still downside risk
Friday's drop really puts price on the back foot. Indeed, there is considerable resistance around the 90.48-80 area and it is only above here that would bring potential for the preferred rally. Right now we are meeting first resistance at 90.07-24 and while this holds we could see another drop. The key support as far as I can see is between 88.75-82 & 89.02. If there is a bullish reversal pattern and 4-hour momentum has begun to turn higher in a bullish divergence this could provide the base. A direct break above 90.48-80 would provoke follow-through to around 91.40-61 which should hold on first test. Above would extend gains towards the 92.31 high.
2nd November: We really do need the 89.75-89.02 area to support to retain a stronger chance of a second rally higher although only below the 88.00 low really rules out another rally. A move above 90.48-80 will help - and then the 91.61 corrective high. Min target is at 92.89.
Well, that was quite a drop and it's a little difficult trying to identify quite where any low should develop. The 89.18 low seen this morning is quite close to the 89.02 retracement support but there is further around 88.75-82. In deed, while the 90.07-24 area caps we should be aware of the continued downside risk to 88.75-82 at least. Below there I can see a projection at 88.26 and this is probably the last support... However, around the 88.00-26 area we should pause and watch as only below 88.00 would see this decline extend towards the 87.10-40 area... Also note support at 86.98 and 86.35.
2nd November: I can't rule out a total reversal lower although it's not my preference. However, wait for break of 88.00-26 and if this is seen then the risk is for losses to 87.10-40, 86.98 and 86.35 at least. Below there the implication is for losses to around 84.00-50.
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 along with a new report showing the prior day’s support & resistance levels.