Forex Investment and Currency Trading

• The move below the $135.14 area opens up the possibility of a double top forming that could give a much deeper correction with a target of the mid $120’s BUT
• The day is young and we may not sustain the break at the close and there is very good support in the $130.80 to $131.50 range (trend lines and 55 day moving average)
• The present correction so far has been 10.4% high to low compared to a similarly aggressive correction in March of 11.4%, which became a platform for a renewed surge when the 55-day moving average did not give way.
• So the read is as follows
      

            1. Close below $135.14 is reasonably constructive and leaves open the door for a test of  these major supports.

                 2. Close below $130.80-131.50 is very constructive and would suggest an extension of the move to at least $125 and possibly $120.

               3. Close above $135.14 would suggest a danger that this is just another sharp correction that sets a platform for yet another sharp rally.

Any of these could happen. If we were to stick our necks out we would suspect it closes below $135.14 but above the $130.80-$131.50 range and leaves this as a work in progress for a few more days.