The Euro broke the support specified in yesterday’s report 1.2492, and reached both suggested targets 1.2406 & 1.2295 with perfect success. This “collapse” which dropped the single currency more than 200 pips in less than 24 hours came as a result of breaking the rising trend line from this cycle’s low on the hourly chart 1.2142, which we said about “we believe that a break of this line (in case it happens) will be the technical event of the day.” The subsequent drop matched the importance of this line, and really exciting! This drop broke the Fibo 61.8% support at 1.2344, although it tricked us at the beginning that it will stop at that important level, when it reached an intraday low of 1.2343 and then bounced back above 1.24. Now, we have two heavyweight technical evidences that the trend is down: Breaking the above mentioned trend line, and breaking the Fibo 61.8% support. Therefore, we see a very gloomy technical outlook for the Euro, we believe dipping below 1.2142 is only a matter of time. Today’s support is at 1.2256, and breaking it, would resume this collapse, targeting a test of this cycle’s low 1.2142, and then the psychological 1.2000. As for the resistance, it is provided by the falling trend line from Friday’s top. Breaking this line will take the price higher to Fibonacci retracement levels for the short term, in te area between 1.2420 & 1.2515.

Support:

• 1.2256: important intraday level & a previous support area which showed strength.

• 1.2142: This cycle’s low, and the low of the last 4 years!.

• 1.2000: psychological level.

Resistance:

• 1.2364: the falling trend line from Friday’s top on intraday charts.

• 1.2420: Fibonacci 38.2% for the drop from 1.2670.

• 1.2515: Fibonacci 61.8% for the drop from 1.2670.