The Euro broke both the support and resistance specified in yesterday’s report, without being able to reach the targets specified. However, the dollar managed to drag the Euro to 1.3130. And as we said yesterday’s report: “The fact that the rising move is slowing down warns of a possible correction for the whole rise from Friday’s low. Such a correction would be a violent one, with its size a little less than 200 pips, since its ideal target is at 1.3086.” And up until now, we have seen the price dropping from Tuesday’s top almost 130 pips! Technically, what is really important is that we are approaching a very important trend line, and are about to test it: the trend line rising from June 29th low on hourly the chart, which is running very close to yesterday’s low. Therefore, we should keep eyes & mind open today, and consider all scenarios, and keep separate trading plans ready. If we test the above mentioned trend line, it will be the single most important technical event for the rest of the week. This line is at 1.3130, and should not be broken in order to keep the technical outlook positive. But if broken, we will witness a strong drop to 1.3026 at least, and probably will be followed by a test of the important 1.2933 as well. On the other hand, short term resistance is at 1.3194, and it is the key for more gains. If we break it, we will target 1.3311 & 1.3383.

Support:

• 1.3130: the rising trend line from Jun 29th low & yesterday’s low. The single most important support for the time being.

• 1.3026: Jul 20th high.

• 1.2933: Fibonacci 61.8% for the rise from 1.2731.

Resistance:

• 1.3194: the falling trend line from Tuesday’s high on intraday charts.

• 1.3311: Mar 24th low.

• 1.3383: Mar 31st low.