Prices are testing long-term trend line resistance set from May 2011 (now at 1.2989). A break above this barrier threatens to spark a major upside trend reversal, initially exposing 1.3129. Initial support lines up at 1.2827, the 23.6% Fibonacci expansion, with a drop below that exposing the 1.27 figure and the 38.2% level at 1.2616. We continue to hold short.

Daily Chart - Created Using FXCM Marketscope 2.0

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

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