The Euro broke the resistance specified in yesterday’s report, and jumped for more than 100 pips, without reaching the suggested target 1.2435 (yesterday’s high was 1.2412). This climb has brought the Euro close to the top of the hourly channel falling from May 10th high. The upper line in this channel has a great significance, and it is the line which is guarding the downtrend. It goes without saying that breaking this line will result in a change in direction for the short term. But, we highly doubt that it can change the medium term dark outlook. This line is currently running at 1.2399, and if broken, a dramatic rise will takeoff up to the important 1.2511. If this one is also broken, the next target will be 1.2604. on the other hand, the support is obviously provided by the rising trend line from yesterday’s low on intraday charts. This line is at 1.2336 currently, and by breaking it the price will continue to trade within the channel. This will lead to another drop, targeting a test of yesterday’s low 1.2223 first, then a new 4-year low at 1.2113.

Support:

• 1.2336: the rising trend line from this week’s low (so far).

• 1.2223: yesterday’s low.

• 1.2113: Apr 17th 2006 low.

Resistance:

• 1.2399: the top of the falling channel on the hourly chart..

• 1.2511: May 10th low.

• 1.2604: May 12th important low.