The Daily Forecaster: EURUSD
Bias: We should now see losses to 1.2840 and 1.2803
The underlying MT direction is bearish while the daily bias is bearish. This may indicate price consolidation or an unclear wave structure that needs confirmation. Note key MT support & resistance levels that may break the MT trend or would suggest a resumption of the move lower. It is very 2 important that you consider either bullish or bearish set up patterns in indicators or lower time frame charts to support S&R breaks. 2
Consider buy set ups at: 1.2800-25 (care)
Consider sell set ups at: 1.2915
Yesterday was always going to be a cautious one. The downside did see a marginal new low but then a correction that stalled at the 4-hour Price Equilibrium Cloud. We have two options here - the first being that we saw a completed wave at 1.2881 and the second that the low was only part of the decline. I tend to feel the latter is more likely. This would imply that we should see losses back down to the 1.2864-81 area en route the 1.2840 projection. From there expect somewhere around 40 points in a correction before extending to the 1.2803 area. From here expect as much as 100 points in a correction.
A direct break back above 1.3000-10 would risk further gains to the 1.3045-50 pivot resistance. Above there is Friday's 1.3106 high.
Medium Term Outlook
19th March: The shortfall in the downside target (1.2887) and the subsequent shortfall in the correction (within an impulsive move lower) both failed. This is pointing to the greater likelihood that we are seeing a corrective structure developing. This can still extend lower but we're going to have to watch this carefully. At this point I feel we have potential down to 1.2803 and after a correction to the 1.2700 area (approximately). If this develops as I feel then we'd still get a correction and another new low before this reverses higher. However, in general do watch for bullish divergences from the daily chart through 4-hour & hourly charts to aid in identifying a reversal higher.