Bombs away today!!!   The movements for the past 3 months are looking more and more like those of 4-6 months ago. Oil took a nice tumble today moving below the key support of $121 which contributed to the Dollar bulls.   Now that trading is below 1.5500 it seems that next support could be 1.5375 where there is plenty of past congestion.   Below there could lead to a test of previous resistance of 1.5000 and possibly below that to 1.4848, which is 161.8 retrace.   The bearish risk from here is full of congestion around 1.5530 – 1.5600.  

The bears look to have taken control after the failure of staying within the channel that we specified last week.   We are trading back at critical congestion where 1.9400 is support, and 1.9339 is extremely important for Sterling Bulls to hold!   Now that 1.9645 was taken out it should be an important level for the bears to control moving forward.   This area could be used as a pivot in the coming days & weeks of trading.  

Remember the kids’ book, “The Little Engine that could?”   Traders have been trying and trying to push above 108.56 without any luck yet.   Will this be the week the dollar makes a new yearly high vs. the yen?   The stochastic is pointing to over-bought but dollar strength has been prevalent lately.  Support from here (short term) looks to be at 107.89 moving forward.   Good luck.