Heading for the key support test: The pair continued to drift lower on Friday and a test of the 1.3565/75 key support is coming close. We however still believe that there’s an ample chance for the market to bounce back to the 1.3620-area before making a second test and a likely break lower.
Constructive selling. Finally, after some days of struggling, it seems like we’ve go the c-wave peak in place. Friday’s decline made the weekly chart end with an up-thrust pattern above the mid body point of the falling benchmark candle from four weeks ago. So the entire setup is now very much in favor of a downside acceleration. Topside bounces should now be limited to 138.96 and should, if seen, be sold.
Time for an upside reaction? Selling appears to completely having dried up arriving in the key support zone. For a week the pair has been stuck in a narrow range with failed downside attempts. Given the importance of the support cluster and the sluggish downside momentum we find it increasingly likely that Mr. Market soon will make an attempt higher. Set the alarm at 1.0680 to watch price action when we break higher.
Stabilizing: Selling appears to have eased and the market stabilized around current levels however in order to end the downside correction we need so some constructive buying. A move (and preferably a close) above 111.16 will a first such step.
