Prices are rebounding from support at a Rising Wedge pattern set from the early-October swing bottom but a Bearish Engulfing candlestick formation remains valid and continues to warn of forthcoming weakness. Initial resistance is in the 1.0484-1.0503 area, with a break above that exposing 1.0578 (the August 9 close). Wedge support is now at 1.0396. A drop below that aims for the 23.65 Fibonacci expansion at 1.0322. We continue to hold short.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com
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