Prices completed a bearish Three Inside Down candlestick pattern below falling trend line resistance set from May 2011 and broke through upward-sloping support set from the June swing bottom, hinting a significant reversal is at hand. Initial rising trend line support is at 1.2892, followed by the 23.6% Fibonacci expansion level (1.2826). A reversal back above the trend line (now at 1.3018) exposes a long-term downward-sloping barrier at 1.3089. We have now entered short.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com
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