Daily Outlook

I was always a little nervous of the bullish call with the expectation for a general reversal high in the U.S. Dollar. Yesterday's failure to extend gains and slip lower through what appears to be a support line from the 0.8904 is threatening a deeper reversal lower. A break of yesterday's 0.9115 low would increase that pressure and below the 0.9094 low then confirm follow-through to 0.9053-70. Take care as this could cause a reaction but overall I feel the downside should then extend to the 0.8966-89 area at least. Expect a correction there before the next leg lower to retest the 0.8904 low...

If instead this manages to break back above the 0.9182 high then I'll have to rethink the situation. Assuming this comes with general U.S. Dollar losses it would tend to resurrect the bullish structure for a rally through 0.9233 and to 0.9270 minimum - more likely the 0.9301-27 resistance before a correction. After that is over we should well see a test of the 0.9390-16 area - where the weekly corrective highs rest...

Medium Term Outlook

6th August:

Much depends on today I think - if this does break lower as I am now beginning to suspect then the 0.8966-89 and 0.8904 areas are the next major supports with the lower level quite likely to cause a correction. There's also support at the 0.8850 pivot area.

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If the 0.9182 high breaks it will swing things back in favor of the rally for 0.9270 & 0.9301-27 en route the 0.9390-16 area which should pause the move.