Last Monday's analysis ended with the following predictions that have been relevant to the price moves that have taken place since then:
1. Looks like we have made a bearish double top at 1.6250.
2. Cautious bearish bias.
3. A sustained break below 1.6115 should give a bearish bias down to 1.6056 at least.
4. Touch trade long under quiet market conditions at 1.6115
This was an excellent forecast, as can be seen in the 1 hour chart below:
The primary move since the last forecast was bearish. Market conditions were not quiet when the price broke through 1.6115, it happened outside the London/NY session, at which time trades in this pair are not recommended. The break did give a move down to 1.6056 and below. From the price action on the morning of 29 October, it looks as if 1.6115 has become resistance.
Turning to the future, let's start by examining the weekly chart:
Last week was a slightly bearish doji, the most significant things about it were its high (at almost exactly the expected 1.6250 resistance level) and its close, which was just below the resistance level at 1.6177. The bearishness of the pattern has been enhanced by the bearish action so far of this week's candle.
Let’s turn to the daily chart now for a more detailed look:
There is nothing special about any of this week's daily candles, except to say that it has been all bearish. What the daily chart does reveal is a local price zone at around the key psychological 1.6000 level that first acted as support, then resistance, and may now be acting as support again.
The conclusions and recommendations that can be drawn from our analysis are:
1. Overall bearish bias continues, but bearish momentum may slow down now.
2. Weaker probability of support at 1.6000, stronger probability of support at 1.5890.
3. Touch trades possible today: long under relaxed conditions at first London session's test of 1.6000 and short at first London session's test of 1.6115.
4. A sustained break of 1.6000 to the downside should send price down to 1.5900.
5. A sustained break of 1.6115 to the upside should send price up to 1.6175.