Prices corrected back to 1.2480s as anticipated and then began a small final rally leg up. The rally may continue for a short while reaching perhaps the 1.2650s before rolling over. The next move down will be quite strong and could take prices as far back as the 1.18 lows. Looking at the bigger picture it is probable that this correction is part of a larger consolidation which may keep prices range-bound between the 1.26s and 1.18s for several weeks yet.

Analysis prepared by:

Joaquin Monfort
Forex4you analyst