Prices broke above key long-term trend resistance set from late July 2011, hinting at a significant upside reversal in progress. A bearish Rising Wedge pattern remains valid however and negative RSI divergence warns of ebbing upside momentum. A break above the wedge top (now at 1.0511) initially targets the August 9 close at 1.0578. Alternatively, a drop below trend line resistance-turned support (1.0465l) exposes the wedge bottom at 1.0417. Our short position was stopped out Thursday on a close above 1.0479.

Daily Chart - Created Using FXCM Marketscope 2.0

--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com

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