Strategy: Pending Short
Prices are recoiling from resistance at the top of a Rising Wedge pattern carved out since late July, a broadly bearish setup. Near-term support is at 1.2442, with a break below that exposing the Edge bottom now at 1.2358. Clearing the latter boundary confirms resumption of the long-term down trend and we will look for a daily close below that level to re-enter short. Alternatively, a break above the Wedge top (now at 1.2569) targets the top of major falling channel encapsulating prices since late August 2011 (1.2688).
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com
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