To follow on from yesterday's comments:
BIAS: The 1.2944 - 1.3038 range appears to be critical to the next larger move
MAIN ANALYSIS: We saw gains as expected.. But actually much stronger than I had thought to reach 1.3013. Being the upper end of the target I suggested on Monday there is a risk that we've seen a more cumbersome final push higher. However, within yesterday's rally I feel that we should also consider the possibility of an even higher high. Thus, we have three options today:
- that we see a break above 1.3013 that should extend gains into the 1.3030-38 area and then reverse lower.
- that price breaks directly below 1.2944 which would take us back to the prior expectation of deeper losses, initially back to just above the 1.2880 low but later towards 1.2825-37 at least.
COUNTER ANALYSIS: Only a direct break above 1.3040 would suggest we saw the correction end at 1.2880 and therefore we should be expecting more direct gains again. Note the 1.3083 corrective high and pivot resistance that could stall the move. Above there would extend gains that should then make their way back to the 1.3139-72 highs... and potentially 1.3192-1.3221...
For more information regarding the support & resistance and medium term outlook please see the attached PDF file.