The Euro broke the support specified in yesterday’s report 1.2282, and dropped as expected, but it settled for a bottom very close to the Fibonacci 38.2% at 1.2240, as it reached 1.2243 during the Asian session. When looking at the attached chart, we immediately realize that the retreat started on Monday could mean a lot. It came from the top of the hourly chart rising trend channel, exactly, and started a strong fall. That is why we expect this drop to go on, and keep escaping further away from the channel top. And since the bottom of this channel is already below 1.20, we expect the price to go below 1.20 on the medium term. As for the short term, the Asian session low which is very close to Fibonacci 38.2% at 1.2243, will be support of the day. If broken, the price will keep dropping, targeting Fibonacci retracement levels for the whole rise from this cycle’s low 1.1875. These levels are at 1.2170 & 1.2100, which became a critical medium term level. Today’s resistance is at 1.2301, and in case the price succeeds in breaking above it, it will give itself a chance to test the top of the channel yet again. The top of the channel will be the first target of this break, at 1.2412, and if broken, we will jump to 1.2519.

Support:

• 1.2243: Asian session low which very close to Fibonacci 38.2% for the whole rising move from this cycle’s low to Monday’s high.

• 1.2170: Fibonacci 50% for the whole rising move from this cycle’s low to Monday’s high.

• 1.2100: Fibonacci 61.8% for the whole rising move from this cycle’s low to Monday’s high.

Resistance:

• 1.2301: the top of the descending channel from Monday’s top on intraday charts.

• 1.2412: the top of the main falling trend channel of the hourly chart.

• 1.2519: May 6th high.