Prices recovered from interim support in the 1.2855-1.2902 area to test initial resistance at the top of a falling channel set from mid-September (now at 1.3085).This boundary is reinforced bythe underside of a rising trend line set from the November 13 low (1.3119). A push above the latter level aims for the December 5 high at 1.3126. Alternatively, a drop below support exposes the 38.2% Fib at 1.2737.

Daily Chart - Created Using FXCM Marketscope 2.0

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

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