Prices are testing support at 125.48, the 38.2% Fibonacci retracement level. This barrier is reinforced by a rising trend line connecting major lows since late August. A bounce here sees initial resistance at 127.07, the 23.6% level, with a break above that initially targeting 128.05. Alternatively, a drop through support exposes the 50% Fib at 124.20 and a key channel bottom now squarely a the 124.00 figure.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com
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