The underlying trend is bearish, as the market is below the daily Ichimoku cloud and the tenkan-sen and kijun-sen lines are negatively aligned. RSI is in bearish territory below 50 and has moved out of oversold conditions, suggesting the sell-off has been overdone for now and some consolidation is expected in the near term. The falling 200-day moving average highlights the bearish bias.
A move lower would target 1.2458, which is the 78.6% Fibonacci retracement level of the upleg from 1.2040 (July 2012 low) to 1.3992 (May 2014 high).
A bounce to the upside from current levels would bring into focus the key 1.2800 level.