Prices are testing above falling trend line resistance established from the June 18 high, with a break higher exposing the horizontal support-turned-resistance barrier at 1.2442. Support lines up at the bottom of a rising channel set from the July 24 low, now at 1.2280, with a break below that targeting the 1.2133-61 area marked by the July 13 and August 2 swing lows. We remain broadly bearish but risk/reward considerations argue against entering a trade at current levels and we will stand aside for now.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com
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