Prices put in a Bearish Engulfing candlestick pattern, hinting a move lower is ahead. Negative RSI divergence reinforces the case for a downside scenario. Initial support lines up at 106.15, the 23.6% Fibonacci retracement, with a drop below that targeting channel top resistance-turned-support at 105.62 and the 38.2% Fib at 105.03. Near-term resistance is at 107.95, the December 5 high.

Daily Chart - Created Using FXCM Marketscope 2.0

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

To contact Ilya, e-mail ispivak@dailyfx.com. Follow Ilya on Twitter at @IlyaSpivak

To be added to Ilya's e-mail distribution list, please CLICK HERE

New to FX? Watch this Video. For live market updates, visit the Real Time News Feed

DailyFX provides forex news on the economic reports and political events that influence the currency market.
Learn currency trading with a free practice account and charts from FXCM.