Prices put in a bearish Evening Star candlestick pattern below resistance in the 1.6259-1.6300 area, marked by the late April swing top, hinting a move lower is ahead. Initial support stands at a falling trend line set from April 2011, now at 1.6126. A break below that exposes the 76.4% Fibonacci retracement at 1.6057. Alternatively, a push above resistance targets the 1.65 figure and the 123.6% extension at 1.6544. Risk/reward considerations argue against a trade at current levels and we will remain on the sidelines for now.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com
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