So turns out we were a little conservative when we called for the 1.618 extension at 1.2385 last week ... Pair fell around 6% on Friday depending on your broker, Reuters had the low some 500 pips lower in the 1.14 region - that's a 10% decline. Regardless, pair quickly recovered to the 1.24 - 1.25 zone, consolidating below the underside of a broken channel. Pair continues to respect this line and bears are attempting a push lower Tuesday, currently testing the interim support zone between 1.220 and 1.2320. A break below there would target the the psychologically important 1.2 level, while a reversal back inside the descending channel would target channel/zone resistance confluence between 1.2420 and 1.25. Breach of there would invalidate on the lower time frames, but pair remains bearish on the higher time frames below 1.29 and expect plenty of selling interest on any strength.
