Prices took out support at 1.2830, the 23.6% Fibonacci expansion level, after completing a bearish Three Inside Down candlestick pattern below falling trend line resistance set from May 2011. The pair staged a shallow bounce from the 1.27 figure to retest falling trend line resistance at 1.2778. A break above that exposes the 23.6% Fib anew. Alternatively, a drop below 1.27 targets the 38.2% level at 1.2619. 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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