The pair has been in a multi-year complex corrective downtrend since Jul’08. We prefer to view the setback from 1.4945 (May’11 high) as a wave (Y) of the large corrective pattern which is likely to retest the key swing low at 1.1870 on multi-month basis (a break lower would be also possible).
The rally from 1.2040 (Jul’12 low) could test the Fibonacci resistance zone 1.3485/1.3840 before reversing. A reversal below 1.2660/1.2465 would renew the bear trend. Medium-term downtrend view needs to be reassessed if the currency breaks above 1.4250 (Key EW swing high).
The pair is appeared to be in the final wave [v] of a wave 5 started from 1.2660. Key resistance for the uptrend is around 1.3485 (EW swing high, trend channel resistance and Fibonacci retracement level). A break above however targets 1.3550/1.3665 before reversing. Immediate-term support is at 1.3250. A reversal below 1.3250/1.3140 would signal the completion of wave 5 and would refocus on 1.2995 initially ahead of strong support area at 1.2735/1.2660.