Strategy: Pending Short
Prices are pulling back from resistance at a falling trend line set from May 2011 (1.3143) to test support at 1.2902, the 23.6% Fibonacci retracement. A break below this barrier targets a minor trend line at 1.2786 and the 38.2% retracement at 1.2737. The overall trend continues to favor the downside but we will opt to hold off on entering short until the series of higher lows traced out from the July 24 low is convincingly overturned on a daily closing basis.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com
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