maybe short Eur/USD

The EUR/USD has staged an impressive rally over the past month but the pair has run into resistance at 1.3013-61.8% Fibo of 1.3690-1.1912-the debt crisis inspired decline. Although, markets may believe worst is behind the region, recent credit rating downgrades of Ireland and Portugal should keep traders cautious, making the pair susceptible for a retrace. Therefore, I will take a cautious short with 1.2600 as my target with potential to 1.2500. However, the resiliency that the pair has shown in the face of the downgrades could be a signal of further upside and a move above 1.3100 would change my bias. Also, positive equity markets should remain supportive and I will take my cue from risk sentiment.