FXstreet.com (Barcelona) - The Euro has been rejected after trying to break intra-day high at 1.2990 on a bullish reaction after U.S. trade data, although it failed to old the level and has started a reaction down afterwards, approaching support level at 1.2850.

The EUR/GBP failure to break through intra-day high has produced a selling reaction that has taken the cross down to 1.2900 so far, dropping about 80 pips in early U.S. session, next important level on the downside would be 1.2850, before getting back into the downward trend channel from Dic 18.

Mohammed Isah, economist at FXTechstrategy admits he possibility of re-entering the falling channel: Although the pair continues to trade above its broken falling channel top, loss of momentum at 1.3093 level on Monday and price hesitation on Tuesday remain suggestive of a turn back lower into the said channel. If this occurs, supports at the 1.2766 level, its Jan 23'09 low ahead of the 1.2706 level will be aimed at with price extension towards the 1.2551 level, its Dec 04'08 low expected.