Euro Dollar

The Euro has broken the falling trendline from Aug 27th high, and stayed above it the whole time. That is why, there is still a big probability to surpass 1.4405 and head towards areas above 1.45 for the first time this year, where targets such as 1.4510 and 1.4572 are waiting. We need to see a break of the close resistance 1.4346 to increase confidence.

The ascending trendline drawn from last week's low 91.93, units with the horizontal support line at 92.74, and also with the moving average SMA100, and finally with Fibonacci 38.2% support for the short-term to form the most important support for today. Stabilization above this level is essential to keep the view that the correction for the leg down from 97.77 has already begun, and that short-term downtrend has ended. But, first we have to break through 93.04. Ideally, this correction would target 94.85 or 95.54, and in this case the latter would be a decisive resistance that will determine the trend for the short-term.

The rise that we expect to be in a 5-wave mode, is still developing nicely, reaching 1.46 for the first time this year. We still believe it has enough strength to reach the top of the channel, which is slowly approaching 1.47. The resistance which stopped yesterday's rise is actually 1.4592 (yesterday's high was 1.4600), and we will adopt it as resistance of the day.

Finally, we have tested the most important support level in the current price area: 91.73-91.76, which is the small support area that holds within the lows of July 8th, 10th, and 13th. Price hardly held above it after reaching 91.60. And we think that breaking it would have enough influence to "finally" accelerate the downtrend, and would be followed by a move down to 90.90 or even 89.69. As for attempts to go higher, they would not mean anything without a break of Fibonacci 61.8% resistance at 92.20, which stopped the rise twice, during the American & Asian sessions. If this resistance is broken, we think the USDJPY will target areas above 93 such as 93.42, and if this one is also broken, the next stop would probably be 94.16.

Support:

Euro Dollar

The Euro held above the suggested support 1.4501 and rallied to a new top for this trend at 1.4650, which is still inside the suggested area for a top.

The top of the channel is currently at 1.4682 and this will be a curtail resistance, that could stop the current rise and force a correction of good size.

We favor the formation of a top in these areas as long as the Euro does not break the top of the channel decisively. After that we expect a move down to areas below 1.45.

As this report expected yesterday, the dollar-Yen moved up slightly in a small correction. Our view is still as it was in yesterday's report when we said: "after the plunge from 92.38 last week to 90.19 this morning, the possibility of a correction ahead of 90 is growing. Such a correction could go up to 91.74 (Fibonacci 50% retracement, SMA100 on the hourly chart & the previous important support 91.73-91.76). Or, it could even go to 92.10 (Fibonacci 61.8% retracement, and the descending trendline from last month's peak)." The only changes to this view are that the descending trendline is now below Fibonacci 61.8%, and that the SMA100 is almost exactly at Fibonacci 38.2%.

Euro Dollar

We came close to the ideal target for this correction: 91.74 (Fibonacci 50% retracement, SMA100 on the hourly chart & the previous important support 91.73-91.76), and reached 91.63 yesterday. And now, the falling trend channel is exactly at this level, which makes it the most important resistance for today, more important than 92.10. Although the ideal target for the current correction will still be 91.74, there is a possibility to target 92.10, but when we compare these two targets, we find that the most important is 91.74 since it combines a Fibonacci resistance, and a previous support, and even more important the top of the falling channel.

Dollar-Yen broke the 90.77 support and reached a new bottom only pips below the previous one, before it managed to bounce up. What happened yesterday had two effects. First: the area containing the previous bottom 90.19 & yesterday's bottom 90.11 has provided itself as a good support area. Second: the calculation of Fibonacci resistance has slightly changed, and the new Fibonacci retracement levels are 91.32, 91.70 and 92.07. the return above 91 after reaching yesterday's low shows that the dollar has not given up yet, and that it could try again to reach one of the Fibonacci levels mentioned above.

The euro broke above the rising trend channel for the first time, reaching a new high for this year at 1.4746, and leaving any expectation for a correction to start in these areas, in very bad shape. A break to the upside in a rising channel is usually a signal that shows how powerful the uptrend is, which makes it only logical to expect more gains for the European single currency.

The Euro is approaching at this very moment the bottom of the rising channel on the hourly chart, and in the same area we noticed an intraday support that has shown itself several times lately, which adds more importance to this level. Reaching this area is the most important test for the EURUSD since reaching 1.4766 last Thursday.

If it survives here, there will be a chance to test the most important resistance for the short-term 1.4723 which is the falling trendline from last week's high, and if this resistance is also taken, we will have a good chance of seeing the top of the channel which is currently at 1.4824, this week.

Dollar-Yen is approaching Fibonacci resistance 91.70, at this very moment, for the third time, and we could see a break in the next few hours, especially after breaking the falling trend channel on Friday, and closing above it. After this break, the most important resistance became 92.07, which is the level that the price should break to show seriousness in breaking the channel.

We have reached 92.50 for the first time in two weeks, after breaking all Fibonacci resistance levels for the last move down. But even that the Dollar-Yen broke them all, it could not hold above 92, returning fast to test the previous resistance 91.60-91.63 which became a support. In the same area, we find the rising trendline from last week's low 90.11, which ads more importance to an already important area.

The Euro stopped just below the most important resistance in yesterday's report 1.4639 (Asian session high was 1.4631). But even though, it is trading now above the falling channel, after it succeeded in breaking it. Still, we can spot a trendline that stopped the Euro, which is the rising trendline from inside the falling channel. We can clearly see that price stopped accurately at this line, running currently at 1.4639, the most important resistance for today as it was for yesterday.

We did not even come close to 89.23, but on the contrary tried to break 90.20, but could not hold above it more than a few minutes, then returned fast to below 90 again. And today, 90.20 will still be the most important resistance. If the dollar fails to break it, this pair will go back to falling, after that sharp bounce from 88.22. But, a break of 90.20 would give a chance to approach 91 since the first important resistance in these areas 90.90.

The Euro is testing at this very moment the short-term support 1.4563, after dropping hard in the last half hour. This support is the last barrier before testing Fibonacci 50% which is at 1.4509. Short
-term resistance is 1.4622, and breaking it would give another attempt to reach 1.47 (after yesterday's attempt).

If 1.4563 is broken, then the falling correction will try to reach Fibonacci 50% support at 1.4509, or Fibonacci 61.8% at 1.4430. In this case, this support in particular will become the most important support for the medium term, since breaking it would mean that this drop is more than just a correction, and that the uptrend which started at 1.4176 is already over.

Yesterday's drop stopped with great accuracy at what we called "the most important support" 89.31 (yesterday's low was 89.34). And today, 90.20 will still be the most important resistance. If the dollar fails to break it, this pair will go back to falling, after that sharp bounce from 88.22. But, a break of 90.20 would give a chance to approach 91 since the first important resistance in these areas 90.90.

The Euro accurately reached the retest level that we specified as 1.4588 (yesterday's low 1.4592), and retested the broken channel successfully. Then it started rising and reached the important resistance 1.4720 this morning, which was specified as the most important target in yesterday's report (the high until the moment of preparing this report is 1.4716).

It seems like the Dollar-Yen is moving with in a pattern that looks like a triangle, since in the past 10 days we have seen the formation of 3 descending tops at 90.39, 90.15 & 89.96, and the formation of 3 ascending bottoms 88.22, 88.59 & 88.96. That is why the borders of this pattern (support 88.74 & resistance 89.77) are the most important for the short-term, and breaking either of them is what will give the next move its direction.

Dollar-Yen has tried to break the lower limit of the supposed triangle pattern, but it was not able to overcome Friday's low, if we are to receive a confirmation of the break of the triangle we need to see the price below Friday's low 88.59. That is why this support is the most important for today. On the other hand, the resistance of the day is the upper limit of the triangle formation 89.63. And breaking either of them is what will give the next move its direction.

The Euro advanced to 1.4761 before retreating back to 1.4682, and with that, it stayed for the whole past 24 hours above the important support specified in yesterday's report 1.4668, keeping our positive outlook intact. But even with this new high, things have changed a lot, because the Euro is threatened with a correction for the whole move from 1.4480, after spotting reversal signals on the Japanese candlestick charts: a (Shooting Star) pattern on the hourly chart, and an (Engulfing) pattern on the 4 hour chart.

Dollar-Yen broke 88.59 and reached the target suggested in yesterday's report with astonishing accuracy when the drop stopped at 87.98, compared to our first target 87.97. Then it went up to 89.38 sharply in what might turn out to be some sort of intervention by the Japanese government. And now, it is moving above the important support 87.97, which is the key to reach 87.10.

First we would like to draw your kind attention to the ECB rate decision that will come out later today, and to president Trichet's news conference that will follow. The Euro advanced to 1.4761 before retreating back to 1.4682. And with that, 1.4776 became the most important resistance for the short-term, and the key to reach new tops. If broken, the Euro will be able to reach areas above 1.48 within 24 hours after the break, first of which is 1.4824, then new highs above the tops of September 22nd & 23rd, the most attractive of which is 1.4901.

The Dollar-Yen is testing the limit of the downtrend, which is represented by the falling trendline from August 9th top, and if it is broken, then the Dollar would be invited to show how deep its real strength is over a series of resistance areas starting at 90.67 and reaches 91.63.

The resistance that is attached to this line is 90.29, and if broken, then the line is broken, and the next stop would be 90.67 which is an important stop on the way to the most important stop in these areas 91.63. Short-term support is at 89.32, and if broken the direction would be down to test the important support 88.68, which must hold to prevent another attempt to test 87.97 which survived last week's attempt for a break.

Support:

The Euro stopped at the resistance established in Friday's report 1.4772 with amazing accuracy, a stop which was a signal that we are heading to areas below 1.47. And now, there is a resistance that combines the rising trendline drawn from 1.4566, and the falling trendline drawn from 1.4816, and is currently at 1.4725, if price stay below it, we are heading south.

Finally, the Euro reached new tops for this year, and came very close to our favorite target 1.4901 (the high until this very moment is 1.4898). By taking a look at the drawn channel we find that the important question now is will 1.50 be the next stop? To answer this question, we must estimate the strength of the resistance levels in this area, especially 1.4901 & 1.4953.

The Dollar-Yen dropped to 89 again, and we might see it test 88.68 today. But before that, we need to see a break of 88.96, which is the most important support for the short-term, and if broken the direction would be down to test the important support 88.68, which must hold to prevent another attempt to test 87.97 which survived last week's attempt for a break.

Price could neither break the resistance 90.27, nor the support 88.96 (which was exactly the lowest price after the issuance of the report), and that is why we spent the whole day in a very tight range. What is worth notice this morning, that the falling trendline from 90.44 on the hourly chart, has many touch points with the price.

The Euro broke the yesterday's resistance 1.4899, and reached the first target of this break 1.4966, and came close to 1.50 (the high until the moment of preparing this report is 1.4993). We will adopt this top as resistance of the day, if broken we will head with the Euro to the top of the rising channel on the hourly chart, which is currently at 1.5040, and may be we will reach the highest level since Aug 2008, at the resistance 1.5082. on the other hand, the support 1.4964 obviously held during the last few hours, that is why we will consider it the short-term most important support.

The Dollar-Yen stopped exactly at the first resistance in yesterday's report (highest price after the issuance of yesterday's report is 90.97), and it did not break the support at 90.07, which means that yesterday's movement did not have any technical impact, and did not break the important support nor the important resistance.

The Euro broke the yesterday's support 1.4964, and reached the first target of this break, and Fibonacci important support 1.4891, tested it strongly, but eventually it survived (yesterday's low 1.4881). We will adopt this support level as support of the day, because if it holds, this would mean that the short-term correction is already over, and that we are heading to areas above yesterday's high 1.4993. But, if broken, what will be expected is a correction for the move up from 1.4480, and if this is the case, targets will not be less than 1.4797, and may be 1.4737 also.

The Dollar-Yen with amazing accuracy at the first support in yesterday's report (lowest price after the issuance of yesterday's report is 90.06), and then rose to 91.05, breaking 90.73 on the way, but what followed was a modest move. The most important support is the Fibonacci 61.8% for the short-term at 89.77, and if broken the direction would be down to test the important support
88.68, which must hold to prevent another attempt to test 87.97 which survived 2 weeks ago an attempt for a break.

We can say that the Euro is still facing trouble in the 1.5045-1.5062 area, and with closing on towards 1.5082 very slowly, we should be on the watch for a top near this level, where a relatively sizable correction is expected to begin. The most important resistance for now is 1.5082, and only breaking it would weaken the probability of a top formation in this area. The most important support is the bottom of the rising channel on the hourly charts, which meets the moving average SMA100 at 1.4992. If broken, we expect a correction to match the rise from 1.4480, which would take the price in the next few days to 1.4840 at the very least. But, if things go against our expectations, and the price rise and breaks 1.5082, that would open the way towards 1.5144 & 1.5200.

Dollar-Yen reached 92 for the first time in more than a month. And after breaking 91.63, its is only logical to say that the odds favor a continuation of this slow rise, probably to our previously suggested target area 92.52-58, which could be an area for the price to reverse from, and start correcting the whole rise from 87.98.

Short-term resistance is 91.94, and breaking it would mean we are heading towards the target area 92.52-58, or may be to a more exciting and attractive target, which is 92.88: Fibonacci 50% resistance for the whole down move from 97.77 to 87.98.

As expected, Dollar-Yen continued this slow rise, and we still believe that it is heading very slowly probably towards our previously suggested target area 92.52-58, which could be an area for the price to reverse from, and start correcting the whole rise from 87.98. Short-term resistance is 92.27 and breaking it would mean we are heading towards the target area 92.52-58, or may be to a more exciting and attractive target, which is 92.88: Fibonacci 50% resistance for the whole down move from 97.77 to 87.98.

Exactly as it was expected, the Euro collapsed the minute it broke 1.4992, and stopped only 4 pips before our target 1.4840. It is only normal to see it trying to rise now and trying to get back above 1.49, but breaking the trendline put the Euro in a negative technical situation that it will not escape by going back above 1.49.

In agreement with the negative technical outlook we talked about in yesterday's report, the Euro stopped at the first resistance in the report 1.4927 with great accuracy (yesterday's high 1.4926), then dropped breaking the support 1.4861, and reached the first target of that break 1.4771 with great accuracy as well (yesterday's low 1.4769). We still favor more downside movement, which is an expectation built on the negative technical outlook after breaking 1.4992, but we should not neglect the rising probability of an upward correction for the drop from 1.5061, which reached almost 300 pips so far.

The Dollar-Yen stayed below the resistance 92.27, broke the support 91.98, and reached the first target for this break 91.26 successfully. With this down move, we are getting closer to the bottom of the rising trend channel on the hourly chart, currently at 90.76, making it support of the day. Staying above it, would give this pair a chance to correct the drop from Monday's high 92.31, creating a correction that could reach 91.84, the most important resistance for the short-term.

Dollar-Yen broke 90.76 and had some drop after that, but it stopped before 90. In spite of that, the technical outlook became more negative, because we broke the rising channel that we have been monitoring lately. The most important support for the short-term is 90.16, and until this moment it managed to hold above it.

In agreement with the negative technical outlook we talked about in the past two days, the Euro stopped at the first resistance in the report 1.4844 with great accuracy (highest price after the issuance of the report is 1.4840), then dropped breaking the support 1.4801, and reached the first target of that break 1.4702. And after reaching 1.4702, we should not neglect the rising probability of an upward correction for the drop from 1.5061, which reached almost 400 pips so far.

The Euro broke the short-term resistance 1.4737, and reached the first target suggested for this break at 1.4827 successfully. The most important question for now is this: Is the current rise a corrective or impulsive move? We believe that the limit separating those two possibilities is 1.4916, which is Fibonacci 61.8% for the drop from 1.5061. And as long as the Euro stays below this resistance it is considered a corrective rise, while breaking it would announce more upside movement to come, probably to reach new highs above the last top 1.5061.

As we have expected in Friday's report, Dollar-Yen broke the support 90.75 and reached both suggested targets 90.16 & 89.61 successfully. This drop that started on Thursday and continued into the new week, was the result of stopping near Fibonacci 61.8% resistance at 9.52, and as you know, stopping near Fibonacci resistance levels is an evidence that the trend in down. But on the other hand, the abovementioned drop cashed in 250 pips approximately, which could create a correction from here.

In spite of the importance of the 1.4682 support that has stopped price twice exactly at the same price, we will not wait until it is broken to turn our outlook for the Euro to negative. We will set out most important support at Fibonacci 61.8% for the short-term 1.4744, because it is the last important support defending 1.4682, and if 1.4744 is broken, the odds of breaking 1.4682 on a third attempt will be big.

Down to the pip, the Dollar-Yen stopped at Fibonacci resistance specified in yesterday's report 90.68 (yesterday's high is EXACTLY 90.68), and as you know, stopping near Fibonacci resistance levels is an evidence that the trend in down. That’s why we find ourselves favoring a continuation of the short-term downtrend as long as we are below 90.68. And we will await a break of short-term Fibonacci support 90.16, after the price literally "sat" on it for the past few hours. If we break this support the downtrend will continue, and will target 89.61 first, then 89.07 and may be the important 88.64.

The Euro broke short-term support 1.4744 and successfully reached the first suggested target 1.4649. But the point where yesterday's drop stopped, uncovered a very harmonized channel, and price has touched its lines a whole 7 times. Yesterday's low was exactly at the bottom of that channel, as the attached chart shows (hourly chart). We will monitor this channel to try and specify the direction, and we strongly believe that if this channel is broken to the downside, the medium-term price direction will be in a downtrend.

After stopping on Monday, at Fibonacci resistance 90.68 down to the pip, Dollar-Yen stopped yesterday at the moving average SMA100, with the same kind of accuracy. And as you know, stopping near Fibonacci resistance levels (and moving averages as well) is an evidence that the trend in down. That’s why we find ourselves favoring a continuation of the short-term downtrend as long as we are below 90.68.

Dollar-Yen broke Fibonacci resistance 90.68 and reached 91.28 as we accepted, with accuracy (yesterday's high 91.30), before retreating fast. This behavior redefined the rising channel on the hourly chart to make its bottom at 90.18. And when calculating Fibonacci 61.8% resistance for the short-term (for the drop from yesterday's high), we find that it is at the resistance level of 90.90.

The Euro broke the resistance specified in yesterday's report 1.4942 and reached the first target suggest for his break 1.5014 with good accuracy (yesterday's high was 1.5018). Yesterday's target will be today's resistance, and if broken we expect this rise to go on, reaching new highs that we have not seen this year, first of which is 1.5082, then 1.5144.

As we said yesterday, the two-time stop at the descending trendline on Friday, and at Fibonacci 50% resistance at the beginning of the week, the borders of the downtrend is getting clearer and clearer. The falling trendline is now at short-term Fibonacci 61.8% resistance is at 90.37, meeting them in the same area is the moving average SMA100, making this area the most important for the short-term. Staying below it means that bears are in control.

More confidence for the downtrend will be gained once we break 89.79, the support provided by the rising trendline from this weeks low. Such a break will target 89.40 then the important bottom 88.82. If a surprise happens, and we break 90.37, we will target 90.90 first, then 91.30.

Support:

In the past 24 hours, the Euro have not broken the support 1.4925 nor the resistance 1.5014, that the price stopped at again with accuracy (yesterday's high is exactly Monday's high at 1.5018). And now, it looks like there is an attempt to break the rising trendline from November 3rd bottoms, which is currently at 1.4975. If the Dollar manages to drag the Euro to below this line, the rising trend from last weeks high 1.4625 will be over. And that suggests there will be a correction matching the size of this trend that will force the Euro to areas below 1.49 where we find three attractive targets: Fibonacci 38.2 for the above mentioned uptrend at 1.4868, and Fibonacci 50% at 1.4821, and before them the resistance that stopped the Euro several times last week at 1.4897.

Dollar-Yen broke the support 89.79 and reached the first target suggested for that break 89.40 successfully. The break of 89.79, the support that was provided to us by the rising trendline from last week's low, clearly means that the short-term trend is a down trend. However, the correction of yesterday's drop has already started, and is getting closer and closer to the broken trendline at 89.82 as this report is prepared. But the most important resistance is 90.23, where the falling trendline from October 27th top awaits. The bears will be in control as long as price is below this line that provides today's most important resistance.

For the past 24 hours, the Dollar-yen did not break any of the levels specified in yesterday's report, it did not penetrate 90.23, it did not drop below 89.53. The most important thing to happen from a technical point of view was the fact that the falling trendline and the rising broken trendline came closer to each other. The most important resistance is provided by the falling trendline from October 27th top, which is currently at 90.00.

The Euro fluctuated in a tight range, breaking both the support & resistance specified in yesterday's report, without reaching the target in either cases, and without any large moves to follow the breaks. Short-term support is still at 1.4975 where there is the moving average SMA100, and the previous support. If broken, the Euro will probably fall today in a correction for the last move up from 1.4625, targeting 1.4886 & 1.4836 and may be the most important support for medium-term currently at 1.4786. In this case, the later will become a crucial support, for setting the direction for the next few days, because breaking it would indicate that the drop from 1.5047 is not just a correction.

For the past 24 hours, the Dollar-yen did not break any of the levels specified in yesterday's report, it did not penetrate 90.23, it did not drop below 89.53. The most important thing to happen from a technical point of view was the fact that the falling trendline and the rising broken trendline came closer to each other. The most important resistance is provided by the falling trendline from October 27th top, which is currently at 90.00.

The Euro moved in both directions, before choosing the upside, creating a rising move that continued from Friday until after the open last night, that elevated the EURUSD to 1.4971 until now. The most important support for medium-term is 1.4786, which is a crucial support, for setting the direction for the next few days, because breaking it would indicate that the drop from 1.5047 is not just a correction. Such a break would harm the technical outlook not just for the short-term but for the medium-term as well. However, for the short-term, the most important support is 1.4934, and breaking it would indicate that the fall will carry on and target the important 1.4786, and if broken we will see a test of the bottom that we saw twice 1.4682.

After halting with a reasonable accuracy near the resistance of Friday's report 90.52, Dollar-Yen broke the support 90.02 and reached the first suggested target 89.60. Friday's price behavior introduced the support 89.46, that we will adopt as support of the day. IF this support is taken, we will finally see the long awaited visit of 88.82, the important support for the medium-term. And if broken the next target will be October 13th low 88.13. As for the resistance, it comes from short-term Fibonacci 61.8% at 90.12. A break here would indicate that the odds of surpassing Friday's high are very good, and that will target 90.90 first, and may be 91.31.

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As expected, the Euro dropped after breaking 1.4934, reaching the first suggested target 1.4879 successfully, and getting close somehow to the second target and important level 1.4786. This behavior only gave us more confidence in the importance of 1.4786, where there is Fibonacci 61.8% for the up-move from 1.4625 to 1.5047, especially with the rising trendline from August 17th low, approaching this level. Short-term support is nearby at 1.4876, a break here would target Fibonacci 61.8% for the rising move from yesterday's low which is at 1.4839. This is the last notable support before the all important 1.4786.

Dollar-Yen broke both the support & resistance specified in yesterday's report without being able to create any large moves in both cases. Now, the price is trying hard to hold above 89, where Fibonacci 61.8% for the short-term is at 89.01. If this level holds, we will see an upward correction, while breaking this level in specific indicates a continuation of the downside movement towards

Dollar-Yen is still holding on above 89 , but on the other hand it was not able to surpass the previous top at 89.52. Now, the price is trying hard to hold above 89, where Fibonacci 61.8% for the short-term is at 89.01. If this level holds, we will see an upward correction, while breaking this level in specific indicates a continuation of the downside movement towards 88.13, which is the last important support before the last 15 years low 87.10.

The Euro broke the resistance 1.4935, and came very close to our first suggested target at 1.4998, when it reached a top at 1.4990, before retreating back to 1.49 this morning. Short-term resistance is provided by the falling trendline from yesterday's high on the intraday charts, which is currently at 1.4931. If this resistance is overtaken, then the technical outlook will have the strength to reach 1.4998 first, and if this is broke we have the right to expect 1.5082 for the first time this year.

The Euro dropped and broke the specified support in Friday’s report 1.4877, successfully reaching the first suggested target 1.4820. But it stayed above the most important support 1.4786. Short-term support is provided by the rising trendline from Friday’s low on intraday charts, and if broken we will get another chance to test 1.4786 after Friday’s attempt that stopped at 1.4800.

Dollar-Yen moved in a very tight range on Friday, without any technically significant moves! The down movement has slowed down, drawing our attention to what could be a wedge pattern, which is a pattern that could limit the current drop to the bottom of this pattern, or a support that is close to it, and could push price higher on the short-term.

Although it broke the resistance at 1.4952, The Euro was unable to surpass 1.50. The sharp drop that followed made 1.4875 the most important support for the short-term. This support, could reverse this drop, and initiate a rising move. But if it is broken, the drop coming from 1.4997 will continue, targeting 1.4820 first, and then the most important support for the time being at 1.4786.

Dollar-Yen moved in a tight range again, but it dropped to 88.54 this morning which is the same level that stopped yesterday's drop! The down movement has slowed down, drawing our attention to what could be a wedge pattern, which is a pattern that could limit the current drop to the bottom of this pattern, or a support that is close to it, and could push price higher on the short- term.

The Euro broke the resistance 1.4951 and touched 1.50 this morning, but it stopped before 1.5018. This will be the “resistance of the day” and breaking it will give way to reach 1.5082 for the first time this year, and may be later a jump to 1.5144.

But, exhaustion is starting to appear on the RSI indicator on many timeframes, including the hourly chart, which could weaken the Euro, and lead it to drop without breaking 1.5018. In this case, we will head towards short –term support at 1.4981, and if broken, the targets will be Fibonacci 38.2% for the whole rise from 1.4800 at 1.4925 first, and may be then 1.4878, which is Fibonacci 61.8% and the most important support for the short-term at the moment.

Support:

Dollar-Yen broke the support 88.56, and came close to the suggested target 88.13 (the low until this moment is 88.19). That is why this support will be our “support of the day”, and we believe it is the last significant support before the last 15 years low 87.10. Breaking 88.13 will be a signal that the price is heading to a test of Jan 12th bottom, and this year’s & the last 15 years’ low 87.10, and may be later to levels that have not been seen on the screens since 1995, like 86.40.

Short-term resistance is 88.46, and breaking it would give this pair the needed strength to go back to 89, and specifically to 89.07 first, and may be 89.60 later. The outlook for the medium-term is still negative, and approaching 88.13 only added to the negativity.

Mumbai, Dec 7 : After a long legal wrangle, a Mumbai court Monday ordered the city police to investigate the missing bullet-proof jacket of former Anti-Terrorist Squad (ATS) chief Hemant Karkare, who was killed in a gunbattle with terrorists during the 26/11 terror attacks.

Mazagaon Metropolitan Court Magistrate R. K. Malabade Monday ordered the senior inspector of the Sir J. J. Marg police station to register a first information report (FIR) in the case and report to him by Jan 30, 2010.

Euro Dollar – Falling 5 waves & an awaited upward correction

The Euro broke the support 1.4850 and successfully reached the first target 1.4760, stopping just 5 pips below it, and bouncing back more than 130 pips. We can see a very clear set of 5 waves falling from 1.5139 (as illustrated on the attached chart), that match all of Elliott waves rules. And if our wave count is correct, that means 2 things: first the first phase of the falling trend from 1.5139 is over, and that calls for an upward correction.

USD / JPY – Standing on the edge!

As we expected in yesterday’s report when we said “ a falling correction is the most logical expectation after a move of the size we seen on Friday”, Dollar-Yen broke the support 89.52 and fell to reach 88.75 this morning. It seems that we are standing on an important support, because we have actually touched the trendline rising from 85.07.

Dollar-Yen broke the rising trendline from 85.07 at 88.75 and successfully reached the first target 88.33. Breaking this line indicates there is a continuation of the downside pressures, that emerged after Friday’s top, and if it continues, we will break today’s support which is yesterday’s low 88.16, and would target Fibonacci 50% at 87.78 first, and may be the most important support for the time being : Fibonacci 61.8% for the whole up-move from 84.81 at 87.08.

The Euro slightly surpassed the resistance 1.4844 before completely surrendering to the downtrend. It dropped and successfully reached the first target 1.4724, and came somehow close to the second target 1.4649 (the low until this very moment is 1.4667).

In spite of this big drop, we still have not made it yet to Fibonacci 38.2% for the long term (for the rise from 1.3747) at 1.4610. Short-term support is at 1.4649, and breaking it would mean we will be targeting the above mentioned Fibonacci level first at 1.4610, and then the support area 1.4510/1.4518 that includes several daily bottoms. Short-term resistance is at the Asian session high

The Euro surpassed the resistance 1.4734 without being able to advance, but at the same time, it did not break or approach the support 1.4649. It seems that the fluctuation we have seen has started building a small triangle pattern, with its limits at 1.4734 & 1.4681, and breaking any of these limits is what will set the direction for the short-term.

Dollar-Yen broke the support 88.16 and successfully reached the first suggested target 87.78, but stayed relatively far from the second target, and the most important support for now 87.08. The importance of 87.08 will carry on for the rest of the week, since it is Fibonacci 61.8% support for the rise from 84.81.

Dollar-Yen broke the resistance 89.05 and successfully reached the first target 89.45, then came close to 90, settling for 89.79. this morning the price dropped to 88.36 again, to find the trendline that we introduced in the past few days providing it with support. That was the 4th time the price encountered this line, which clearly means it deserves our attention.

The Euro surpassed the resistance 1.4734 but stopped very close to Wednesday’s high, before reversing, and breaking the support 1.4692, and then reaching the first suggested target 1.4610. The rising trendline from Tuesday’s low (and the lower limit for the supposed triangle pattern) is currently very close to Fibonacci 61.8% for the short-term at 1.4701.

The Euro surpassed the support 1.4656, and settled for 1.4616, but it did nopt test or even come close to the most important resistance 1.4701. The rising trend line from Tuesday’s low (and the lower limit for the supposed triangle pattern) is currently very close to Fibonacci 61.8% for the short-term at 1.4701. This makes this double resistance the most important, and only breaking it would improve the technical outlook for the Euro. If broken, we will enter a correction for the whole drop from 1.5139, which will target 1.4796 at least, and probably 1.4862. As for the support it is at 1.4621 and breaking it would mean that the rising correction from Friday’s low is probably over, and that would target 1.4566 and then 1.4510.
 
Support:

Dollar-Yen slightly pierced through both the support & resistance specified in yesterday’s reports, with a few points in both cases, without being able to generate a real break. Currently we see USDJPY between two lines: the falling trend line from 90.75 (which is currently at 89.28), and the rising trend line from 84.81 (which is currently at 88.59). And since we have two descending tops at 90.75 & 89.79, and two ascending bottoms at 84.81 & 87.35 (which means lack of direction), it is recommended that we do not adopt any direction prior to a break, and it is wise to wait for one of them to break.

The Euro broke the support 1.4621 and successfully reached both suggested targets 1.4566 & 1.4510. And then spent the time holding above 1.45, and that could lead to a correction of the last 5 waves down from 1.4683. If short-term resistance 1.4563 is broken, 1.4614 would be an ideal target for this correction, and at the same time the most important resistance.

Reaching it could provide a good sell opportunity. But, if its broken, the price will gain enough strength to target 1.4667. As for the support, it is provided by the rising trend line from yesterday’s low on the intraday charts, which is currently at 1.4535. If broken, we will target the important 1.4445 (the next important stop), and then 1.4405.
 
Support:

Dollar-Yen broke the resistance 89.28, and jumped close to the 90 level & the suggested target (yesterday’s high 89.93). With this break, the Dollar has gained a technical advantage that should give it the strength to go on. But to keep this advantage, the price should hold above the broken trend line which is currently at 89.21.

Euro Dollar

The Euro broke both the support & resistance of yeserday’s report, before choosing the downward road reaching both suggested targets 1.4445 & 1.4405. With that, the long-term Fibonacci 50% support (1.4445) was broken, and we expect to see Fibonacci 61.8% at 1.4280, and we might see it before the weekend. Short-term resistance is at 1.4452, and breaking it is the key to reach and test the most important resistance for short-term 1.4504.

Dollar-Yen broke the resistance 89.72 and reached the first target 90.08 successfully. This continuation in rising was a result of breaking the falling trend line from 90.75. With this break, the Dollar has gained a technical advantage that should give it the strength to go on.

The Euro broke the support specified in Friday’s report 1.4346, and successfully reached the first target 1.4280. It looks from the channel drawn on the attached chart that 1.4410 is the limit the separates the continuation of the downtrend from its reversal, since it combines the top of the channel with the moving average SMA100.

As long as the price is below this level, the downtrend will continue, looking for fresh lows below Friday’s low 1.4260. Short-term support is at 1.4303 and breaking it would increase confidence in the downtrend, and would target 1.4205 and then the bottom of the channel which is currently at 1.4140. A break of today’s most important resistance 1.4410 would cause a jump to 1.4502, and may be later to 1.4584.

Dollar-Yen broke the specified resistance in Friday’s report 89.80, and successfully reached both targets 90.40 & 90.90 with amazing accuracy (Friday’s high 90.89). We see that the drop that followed to 90.22 is just a short-term correction, and that the advance will carry on after we are done with it to areas above 90.90. We build this opinion on our wave count for the short-term which shows that we are in wave 4 of 5 rising waves that started at 88.91 on Thursday.

Exactly as we have expected, the drop to 90.22 was just a short-term corrective drop, and the price resumed rising short after, to areas above 90.90 as we said in yesterday’s report. Dollar-Yen broke the specified resistance in yesterday’s report 90.46 and successfully reached the first suggested target 91.30.

The Euro broke the support specified in yesterday’s report 1.4303, but it stopped half way between the support & the target, and settled for closing on Friday’s low 1.4260, as yesterday’s low was 1.4264. It looks from the channel drawn on the attached chart that 1.4357 is the limit the separates the continuation of the downtrend from its reversal, since it combines the top of the channel with the moving average SMA100. As long as the price is below this level, the downtrend will continue, looking for fresh lows below Friday’s low 1.4260.

European Union:-

• Tuesday: Germany GfK Consumer Confidence Survey (Previous 3.7, Forecast 3.5), France Producer Prices MoM (Previous 0.8%, Forecast 0.1%) & YoY (Previous -6.6%, Forecast -4.7%).
• Wednesday: Germany Import Price Index MoM (Previous 0.5%, Forecast 0.3%) & YoY (Previous -8.1%, Forecast -5.2%), France Consumer Spending MoM (Previous 1.1%, Forecast 0.5%) & YoY (Previous 3.5%, Forecast 3.3%)

United States:

Japan:

• Monday: Trade Balance (Previous 807.1B, Forecast 300.0B), All Industry Activity Index MoM (Previous -0.6%, Forecast 1.0%),
• Tuesday: Small Business Confidence (Previous 43, Forecast N/A).
• Thursday: BOJ Minutes (Text report).

Australia:

• Tuesday: Conference Board Leading Index (Previous 0.3%, Forecast N/A).

Canada:

• Monday: Retail Sales MoM (Previous 1.0%, Forecast 0.7%), Retail Sales Less Autos MoM (Previous 1.1%, Forecast 0.2%).
• Wednesday: GDP MoM (Previous 0.4%, Forecast 0.3%).

Forex trading by Munther Marji for Forexpros.

The Euro broke the support specified in yesterday’s report 1.4260, but it stopped half way between the support & the target, as yesterday’s low was 1.4216. It looks from the channel drawn on the attached chart that 1.4298 is the limit the separates the continuation of the downtrend from its reversal, since it combines the top of the channel with the moving average SMA100.

In opposition to our expectations, Dollar-Yen broke 91.30, penetrating through the moving average SMA100, and breaking the top of the channel that we introduced. This break, even though it is in an opposite direction of our short-term technical outlook, should not be ignored.

The Euro broke the resistance specified in yesterday’s report 1.4298, but it stopped half way between the support & the target, as the high in the past 24 hours was 1.4365, a few pips below short term resistance 1.4371. This morning the price came back close to this resistance that we consider as resistance of the day, and breaking it would confirm the upward direction that started by breaking the descending channel.

Though it tried more than once, the Dollar-Yen could not break 91.78, and that is why there is almost no change to the technical outlook we spoke about yesterday. The price is invited to show strength against the resistance 91.78 (currently trading pips below it), and if broken, a test of the area that caught our attention 92.31-92.52 will be only a matter of time.

And if this area is broken, the Dollar will take off, towards March 19th low 93.53. On the other hand, if the price fails to create a sustained break of 91.78, a drop towards 91.06 where the moving average SMA100 & the retest level for the broken channel are waiting, will follow. And if this level is broken, the price will drop towards the important 90.03, and if broken we are to see 89.55.

USD/JPY

Though it tried more than once, the Dollar-Yen could not break 91.78, and that is why there is almost no change to the technical outlook we spoke about yesterday. The price is invited to show strength against the resistance 91.78 (currently trading pips below it), and if broken, a test of the area that caught our attention 92.31-92.52 will be only a matter of time.

And if this area is broken, the Dollar will take off, towards March 19th low 93.53. On the other hand, if the price fails to create a sustained break of 91.78, a drop towards 90.90 where the retest level for the broken channel is waiting, will follow. And if this level is broken, the price will drop towards the important 90.03, and if broken we are to see 89.55.

The Euro broke the resistance specified in Thursday’s report 1.4371, but settled for a test of the resistance 1.4410 (Thursday’s high was 1.4416). The technical outlook is still gaining positivity after breaking the falling channel that we talked about all last week, but failure at 1.4410 might be the first signal indicating a new wave of weakness.

And since it is an important resistance, we will consider as resistance of the day, and breaking it would confirm the upward direction that started by breaking the descending channel. Short-term support is Thursday’s resistance 1.4371, and if this important level is broken, this pair would target the important 1.4292 (important for short term and may be medium term as well), and then

Although it surpassed 1.4410, the Euro was unable to maintain its gains, and gave them up, returning to 1.43, where there is a critical support at 1.4308. The price reached 1.4304 before bouncing more than 50 pips until this moment.

The Dollar-Yen broke the resistance area that caught our attention 92.31-92.52. Short-term resistance is provided by the falling trend line from yesterday’s high, currently at 92.50. And if this area is broken, the Dollar will take off, towards March 19th low 93.53, with a possibility to stop at 93.08, where there is a resistance that cannot be ignored.

On the other hand, if the price fails to capitalize on the break of 92.31-92.52, a drop towards 91.30 where the rising trend line from 84.81, will follow. And if this level is broken, the price will drop towards the important 90.30, the most important support for the time being.

Support:

• 91.85: the moving average SMA100 on the hourly chart.

The Euro fluctuated, breaking 1.4308 first, then breaking 1.4380 and flying above 1.44. And as we can see, the price is currently trading inside a falling channel on the hourly chart, with the top of the channel at 1.4449.

At the moment of preparing this report, the Dollar-Yen is approaching 91.60, the rising trend line from 84.81. This point could be critical not just for the short term but for the medium term as well, since breaking it would indicate the termination of the rising trend line from 84.81, which will have a huge effect on the technical outlook for the medium term.

Dollar-Yen broke the trend lien rising from 84.81, but the drop that followed was limited, before going back above the line. This behavior recommends caution, the price should trade below certain levels to maintain any importance for this break. Short-term resistance is 92.45, and the support is at 91.75.

With astonishing accuracy, the Euro stopped at the suggested reversal point 1.4485 (yesterday’s high was 1.4482), and exactly as we expected, started a big drop that reached 200 pips, passing by and breaking the support 1.4454, and reaching both suggested targets 1.4369 & 1.4303 successfully.

And with coming back to areas below 1.43, we once again assure the importance of 1.4264, and we will consider it support of the day, and the borderline between a continuation of the drop from

As we said yesterday, Dollar-Yen broke the trend line rising from 84.81, but the drop that followed was limited, before going back above the line. This behavior recommends caution, since going back above the broken line stripped a lot of importance for this break. Short-term resistance is 93.08, and the support is at 92.24 .

If this support is broken, we will fall to 91.51, and then the important 90.55, which is also another important support for the short term. On the other hand, if the price holds above this support, a short term rise will be initiated, challenging short term resistance at 93.08, and breaking this level would at least lead to challenge the top93.20, targeting the long awaited 93.53, and if this important resistance is broken, we will target 94.05.

The Euro broke the resistance 1.4327 and reached our first suggested target 1.4406 successfully. But after reaching 1.4445 it came back to falling, as it is trading now around 1.4360. And with coming back to these areas, we once again assure the importance of 1.4264, and we will consider it the borderline between a continuation of the drop from 1.4482, or a bounce to the upside.

Srinagar, Jan 9 - An intense cold wave continued to sweep parts of Jammu and Kashmir Saturday as Leh town of Ladakh region recorded a minimum temperature of minus 20.8 degrees Celsius.

"In Leh, the maximum temperature was 0.8 degrees while the minimum was minus 20.8 degrees," an official of the weather department here told IANS.

"The minimum temperature in Srinagar was minus 4.2 degrees Celsius while the maximum was 10.8 degrees."

The Euro broke the resistance specified in Friday’s report 1.4332, and successfully reached both suggested targets 1.4407 & 1.4485. But this rising move have bumped into (And slightly surpassed) the trend line which was the center of our attention all last week, and caused a notable reversal close to 1.4485. Thus, the Asian session top 1.4531 will be an important resistance to determine if this line is able to create another reversal, or if it will be broken this time, letting the price fly. The support is at 1.4485. We will be waiting for a break of either of them to determine short term trend. IF the resistance 1.4531 is broken, the Euro will gain a lot of strength, targeting 1.4625, and the important Fibonacci level 1.4678.

Although it has reached 93.75, the Dollar-Yen has closed obviously on the negative side, below the important trend line on the daily charts. The price broke the support specified in Friday’s report, and successfully reached the first suggested target 92.20. We have explained the importance of Friday’s closing in the last report, and said that closing above or below 93.35 leads to completely different readings: a negative one and a positive one. The closing price came clearly below 93.35 (Fridays close 92.62), which can be read without hesitation as a negative closing. Today, we will be on the watch for this line which is currently at 93.11, and we will take a negative bias towards this pair as long as we are below this most important resistance for the time being.

The Euro did not succeed in its first attempt to break the trend line we talked about yesterday. And also, the price did not move all too much, leaving yesterday’s Asian session top 1.4531 as the important resistance to determine if this line is able to create another reversal, or if it will be broken this time, letting the price fly. The support is at 1.4485. We will be waiting for a break of either of them to determine short term trend. IF the resistance 1.4531 is broken, the Euro will gain a lot of strength, targeting 1.4625, and the important Fibonacci level 1.4678. If the support at 1.4485 is broken, it would indicate that this line has probably created another reversal similar to the one we saw last week, ideally targeting 1.4428 & 1.4365.
 
Support:

We will maintain a negative bias towards this pair, and it is enough to take a look at the attached chart to know the reason why. Dollar-Yen is currently trading below the rising trend line on the hourly chart, and it is vulnerable to a big drop. We explained in the last two reports the importance of Friday’s closing, and said that closing above or below 93.35 leads to completely different readings: a negative one and a positive one. The closing price came clearly below 93.35 (Fridays close 92.62), which can be read without hesitation as a negative closing. Today, we will place our focus on the broken trend line which is currently at 92.40, and we will take a negative bias towards this pair as long as we are below this most important resistance for the time being. Support is at 91.70.

Dollar-Yen broke yesterday’s resistance 91.33 and came close to the suggested target 91.87. The question will be the same for today: will we see a bounce to the upside, or a continuation of the drop? Coming close to 91.87 means getting closer to the ideal target area for this bounce which is the area 91.87-92.59.

The Euro broke the tight range to the upside, by breaking the resistance 1.4531, but did not reach further than 1.4577, stopping close to 38.2% Fibonacci resistance for the medium term
(1.4569). But this break has improved the technical outlook, making us continue to wait for yesterday’s suggested targets, 1.4625 & the important 1.4678, but first we should see a break of
1.4569.

Short term support is at 1.4503, and breaking it would hurt the outlook for the short term to say the least, and could do more than that, because stopping close to Fibonacci 38.2% resistance for the medium term could provide a reversal point for this term (a minor possibility in our opinion). This break targets 1.4420 & 1.4359.

Support:

• 1.4503: short term support.

We have not seen any major moves on Friday. The Euro kept a bottom at 1.4027, which is very close to the most important support at the moment 1.4014, and started to rise, breaking the report's resistance 1.4137, but settled for 1.4180 only, closing just a bit below it. Candlestick watchers can notice that Thursday's candle is in fact a hammer, and that Fridays candle has recorded a higher high, working as a confirmation for the hammer pattern.

Dollar-Yen did not move but 75 pips on Friday, and did not break any major levels during that limited move. Thus, our attention is still revolving around 89.79, the most important support at all for now. As we have said in last week reports, the importance of 89.79 comes from the fact that it is the 61.8% Fibonacci retracement level for the whole up move from 87.35 to 93.75. This very accurate stopping indicates that Fibonacci 61.8% has stopped in the way of more dropping, and could cause it trouble.

Thus, we will consider 89.79 to be a support capable of reversing the short term direction and initiate a rising move from these levels. In case this support is broken the drop will continue, targeting

Dollar-Yen penetrated the important 89.79 before sharply striking up to 90.41, in what could be an attempt to fish stops below this important level. Our attention is still revolving around 89.79, the most important support at all for now. As we have said in last week reports, the importance of 89.79 comes from the fact that it is the 61.8% Fibonacci retracement level for the whole up move from 87.35 to 93.75. This very accurate stopping indicates that Fibonacci 61.8% has stopped in the way of more dropping, and could cause it trouble.

Although it tried 3 times, the highest of which reached 1.4192, the price could not break 1.4184. The Euro kept a bottom at 1.4027, which is very close to the most important support at the moment 1.4014. Candlestick watchers can notice that Thursday's candle is in fact a hammer, and that Fridays candle has recorded a higher high, working as a confirmation for the hammer pattern. This makes the odds favor a continuation of the rise that started at 1.4027, to at least create a matching correction for the whole drop from 1.4577.

The Euro broke 1.4014, and dropped as expected, stopping only 8 pips before our suggested target 1.3928. But the sharp n swift bounce that brought us back above 1.40 may threaten this break, so will it hold? Looking at the hourly chart, we can see that the Euro, and before breaking 1.4014, has stopped at the falling trend line from 1.4554 for a third time, which makes this line one that deserves attention.

The downtrend from 1.4577 will be dominant as long as we are below this line, which is currently at 1.4065, that's why it is resistance of the day. While the support is at

As it is expected, the "trend line that deserves attention" has successfully managed to present support once again, giving the Dollar-Yen a chance to hold above support 89.12, breaking resistance 89.69, and successfully reaching the first suggested target 90.30. This fine bounce may manage to test the most important resistance for now 90.71, which is provided by the falling trend line from 93.75.

Friday’s report shined as the price stopped only 6 pips before the resistance specified in the report, and then started falling, breaking the support 1.3936 and successfully reaching the first suggested target 1.3888. But we have not tested the important 1.3824. Looking at the hourly chart, we can see that the Euro, and before breaking 1.4014 last week, has stopped at the falling trend line from 1.4554 for a third time, which makes this line one that deserves attention.

Dollar-Yen broke the resistance specified in Friday’s report 90.41, but stopped in the middle of the road to the suggested target, at 90.90. This indicates that the bounce we talked about still has the momentum needed to go on. This fine bounce may manage to capitalize on the break of 90.41 to go higher. If the Dollar is meant to achieve more gains from this bounce, it is preferred that we do not break support at 89.94.

After the issuance of the last report, the Euro did not break any of the levels specified in the report. Looking at the hourly chart, we can see that the Euro, and before breaking 1.4014 last week, has stopped at the falling trend line from 1.4554 for a third time, which makes this line one that deserves attention.

Dollar-Yen broke the resistance specified in yesterday’s report 90.36, but stopped in the middle of the road to the suggested target, at 90.92. This indicates that the bounce we talked about still has the momentum needed to go on. This fine bounce may manage to capitalize on the break of 90.36 to go higher.

Dollar-Yen traded in a very tight range, without breaking support or resistance from the report, and we are still watching this bounce, which started to lose momentum. This fine bounce may manage to capitalize on the break of 90.36 to go higher, going through the resistance 90.79.

The Euro broke the resistance 1.3933, and although the rising move did not reach 50 pips, but closing above it indicates that this is a valid break, and makes us believe that the short term down trend is over.

This break faces a difficult resistance at Monday's top 1.3985, and if this break is serious, we should see a break for this resistance specifically. Breaking resistance 1.3985 will initiate a correction for the whole drop from 1.4577, targeting 1.4062 first, then ideal targets start at 1.4128. On the other hand, support is provided by the rising trend line from Monday's bottom
1.3851, which is currently at 1.3930. Breaking this support means that we will test the important 1.3824, and if broken, targets start at 1.3747.

Support:

The Euro came very close to the 4-hour channel on Friday, after breaking the support specified in the report, and the drop stopped only 2 pips before the first suggested target 1.3852. With this move taking us close to the channel bottom, and then a fast bounce reaching 1.3666, the odds of an upside correction remains present, but we need a break of 1.3666 before we can say the odds favor that. Short-term resistance is at 1.3666, and breaking it would indicate that the price is already moving higher after the drop we witnessed last week, even if that was only for a short term correction.

The Pound dropped in a free fall after breaking the support specified in Friday’s report 1.5690, and reached the target 1.5614 successfully. This morning, a new bottom was reached at 1.5532. It seems that this sharp trend is not tired yet, especially after breaking the falling trend channel to the downside, which contributed to this sharp drop.

The Euro stopped only 6 pips above the resistance specified in yesterday's report, and this confirms the importance of 1.3805. Today, this level has double importance, with the falling trend line from 1.4577 touching the above mentioned Fibonacci level. As we said yesterday, with Friday's move taking us close to the channel bottom, and then a fast bounce reaching 1.3666, the odds of an upside correction remains present.

After last Thursday's sharp drop, we can say that the Dollar-Yen has moved horizontally in the same areas for a whole week, in a period of excitement-free trading. And as the important support & resistance levels for the short term approaching each other, expecting a large move to be just around the corner is a completely logical thing. What is worth mentioning is that during last Thursday's drop, we have came close to the long term Fibonacci 61.8% support at 88.23, and there is no doubt that this level is the most important support in these areas.

The Euro broke the support 1.3662 and fell strongly as we expected, reaching the first suggested target 1.3582 successfully, and stopping only 5 pips before the second target 1.3525, Which confirmed a continuation of the downtrend, and an inability of using any chance to create a notable correction. And today, the continuation of the trend is expected, as we are still trading below the falling trend line that is drawn on the attached chart. Short term support is are 1.3572 and breaking it would indicate that we have lived a short correction after Friday's fall, and we are to continue falling today, targeting 1.3525 & 1.3422.

For another day, Dollar-Yen frustrated our hopes for a big move, and stayed another day trading in very tight ranges, and very boring ones! We have not had our major move until now. But this very limited activity should come to an end soon, and a trend will be born, which will bring back some excitement to this pair, after a very boring week. Thus, we will await a break of the support or resistance of the day, and in case we get one, we expect to see a sizeable move in the direction of the break. Our eyes will be on the support 89.83, and breaking it would enhance chances of a drop in the first of this week, targeting 89.22, and then the all important Fibonacci medium & long term support 88.23.

The Euro did not break the resistance nor the support specified in yesterday's report, and traded in a tight range for the past 24 hours. The resistance that is considered the upper limit for the downtrend is 1.3720, and as long as the price is below this level, we favor more downside activity, But the technical outlook changes dramatically the minute this level is broken. The continuation of the downtrend is expected, as we are still trading below the falling trend line drawn from 1.3838. Short term support is are 1.3616 and breaking it would indicate that we have lived a short correction after Friday's fall, and we are to continue falling today, targeting 1.3525 & 1.3422.

Yesterday, Dollar-Yen did not break the support or resistance specified in the report, but it did break 89.83 during the Asian session. This break holds a lot of importance for the short term, since it is a break for the hourly trend line rising from the important bottom 88.53. Thus we will await a break of the Asian session low 89.70 to confirm the break of this trend line, and breaking it would enhance chances of a drop in the coming hours, targeting 89.12, and then the all important Fibonacci medium & long term support 88.23. The resistance stays at 90.22, and the negative technical outlook will not change unless we decisively break this resistance.

The Euro broke the support 1.3618 and traveled more than half the way to the target 1.3544 (yesterday's low 1.3572). The modest drop came after 1.3653 successfully reversed the short term direction. That is why we will consider this top to be resistance of the day. If the price continue to show strength, and broke this resistance, the current rise will go on for the short term at least. We see today's most important target for such a break will be the test of the falling trend line from 1.3838, which is currently at 1.3737. And if broken the next target will be 1.3810. But if 1.3653 holds, and succeeds in reversing short term correction, then the price will fall to support 1.3612, and if broken the targets will be 1.3544 (which may be an ideal target for such a drop, and then 1.3491.

The clear "Reversal Day" pattern proved its strength. As we have expected, the price started to fall immediately after breaking 91.55, reaching 90.84 until now (but without reaching the suggested target 90.40). As we said yesterday, the "Reversal Day" pattern is one of the strongest & most reliable reversal patterns, that is why we will keep our bias towards the Yen, but with caution, because as we get closer & closer to the channel bottom, the odds of a rising correction gets bigger & bigger. Short term most important support is the bottom of the rising channel on the hourly chart which is currently at 90.55. We do not recommend going short before it is broken. If this break takes place, the price will drop targeting 89.90, and then 89.22.

Not a lot of motion in the past 24 hours, it seems that this pair is still building a base, in a step to change short term direction. Today, we see the Dollar-Yen trying to break the falling trend line from 89.48 on the intraday charts. If it succeeds in doing so, we will be in front of a new trend in a new week. This trend line is very close to the resistance 89.39, and that is why this resistance will be resistance of the day.

Breaking it would indicate this pair is targeting the short term Fibonacci retracement levels, and the major 3 levels are at 90.02, 90.43 & 90.83. We picked the first and last of them as targets for the 89.39 break. As for the resistance

The Euro stopped only 4 pips above the resistance specified in yesterday's report 1.3648, and fell hard, breaking the support 1.3589, and successfully reaching the first suggested target 1.3496. It also came sort of close to the second target 1.3442 (yesterdays low was 1.3459). We note on the attached chart that yesterday's low came very close to the trend line slowly rising from 1.3422, to the extent that it could be considered as a 3rd touch of the line. Thus, this line has gained more importance.

The Euro stopped only 8 pips below the support specified in yesterday's report, and rocketed once again, breaking the resistance 1.3653, and stopping only 5 pips below our suggested target 1.3740. Today, we see its best to count on short term levels to lead the way for the single currency on the short term. Short term support is at Fibonacci 61.8% for the micro term (which the price stopped accurately at almost an hour ago). If we break this level, the Euro will start a drop that we expect to be strong, and will target the most important support (for the short term) 1.3549, and if this level is also broken, the drop will go on, and we will probably see another weekly low below Tuesday's 1.3434.

Dollar-Yen broke the support 88.53 only to stop in the middle of the way to the suggested target, settling for 88.31. This break gives chance to more drop, but on one important condition. This condition is to stay below, and not break, the falling trend line from 92.13, which is currently only pips above the current price, at 88.53. If the price stays below this line, more drop is to be expected. Short term support is at 88.31, and if broken we will move slowly towards 87, where the targets 87.72 & 87.00 awaits. The technical outlook stays negative as long as we are below the resistance of the day 88.53.

The Euro is approaching 1.37 as these words are written, and it has topped Fibonacci 76.4% for the short term (1.3686) with very few points, before retreating marginally to 1.3667. We have attached a chart with a suggested wave count, in which there is a set of 5 clear waves, with all the Elliott rules respected within this set.

Thus, as long as the Euro is below the point which started this set, we assure the downtrend is in control, and we assume that the rise from 1.3529 on Friday which is approaching 1.37 now, is only a corrective one. The resistance

Dollar-Yen broke the resistance specified in Friday's report 89.46, and moved exactly as expected, targeting Fibonacci levels, and reaching both suggested targets 90.22 & 90.67 successfully & accurately (today's high so far is 90.66.

Fibonacci resistance 90.60 will be the most important for today, especially after the price has reached it & came back down to the Asian session low. The next few hours will be a match between a very sharp rising correction & a Fibonacci retracement level determined to stop it. If this resistance is broken, the correction will go on and will target 91.18 & the important 91.67.

Support:

* 90.29: hourly support.

* 89.69: Fibonacci 38.2% for the short term.

The Euro broke the support 1.3595, and stopped only 7 pips below the suggested target, and created another bottom in the same area of last Friday's low (1.3529). This boring behavior, and moving back and forth in almost the same areas in the past days, made us wonder if we could be in a triangle of some sort. If this is true, the triangle limits are 1.3673 & 1.3557, but we will espouse Fibonacci 61.8% support & resistance at 1.3566 & 1.3639 to be today's levels. We can only hope to end this boredom with a break of one of these levels.

After Fibonacci resistance 90.66 has succeeded in reversing the short term direction, the price traded under it for the whole past 24 hours, reaching a low of 89.61, and drifting away more than 100 pips from the weekly high, which is in total agreement with Fibonacci analysis that suggests we had a short term direction-changing top at 90.66. This rebound from Fibonacci retracement level with very good accuracy is evidence that the general direction of the short-term is down.

The Euro confirmed it is building the triangle that we suggested yesterday, after it dropped only pips below the lower triangle line, and then it bounced back and rose until it touched the upper line in a very accurate fashion (please refer to the attached chart). The price is still trading within the triangle exactly as it was suggested yesterday, waiting for a real and decisive break for one of its limits. These limits have narrowed towards 1.3658 & 1.3581

The Dollar-Yen kept trading above the important support 89.69 all through the past 24 hours, and it rose breaking the resistance 90.26, and as we expected reached a new weekly high at 90.80, only 4 pips below our suggested target. With this obvious penetration of 90.60, the Dollar is in a good position to achieve more gains, since the technical plea in favor of the Yen (which is stopping accurately at a Fibonacci resistance level) is no longer there.

The Euro rose breaking the resistance 1.3734, jumping 60 pips above it, coming very close to 1.38, but without reaching the first suggested target 1.3838. This expected rise came as a result of breaking the triangle to the upside, and the positive technical outlook which followed this break, and we have talked about it on Friday. To maintain this positive outlook, the Euro should hold above the most important support for the short term 1.3635. But of course, a correction won’t harm the outlook, as long as it holds above this support.

Although the Dollar-Yen reached a new top for this cycle on Friday at 91.07, it closed slightly down, at only 5 pips below the open price, which makes this day a candidate for a “Reversal Day” pattern. Also, the very small real body for Friday’s candlestick makes it very close to a “Doji” pattern, and if we want to be extra specific we can refer to it as a “Shooting Star” candle pattern.

We said yesterday "To maintain this positive outlook, the Euro should hold above the most important support for the short term 1.3635. But of course, a correction won't harm the outlook, as long as it holds above this support." And it seems that the Euro was eavesdropping! The price broke the support 1.3726, and dropped as expected in a correction which stopped only 3 pips before the "ideal target" 1.3635! As we can see in the chart, yesterday's low was close to 2 important support levels: the upper line in the triangle & Fibonacci 61.8%.Thus, the outlook is still positive and will be as long as we are above 1.3635.

After yesterday's report was issued, the Dollar-Yen rose to 90.78 (2 pips above the resistance of the report 90.76), then the expected drop started breaking the support 90.33, and reached 89.97 so far. Although the downtrend did not reach its expected targets, and hardly gained 80 pips from yesterday's top, but we believe that the technical evidences have triumphed. And today they are still pointing lower, especially after breaking 90.33. We expect the "shooting star" pattern that happened on Friday to keep pressuring the price, driving it down. Short term resistance is at 90.47 which combines Fibonacci 61.8% for yesterday's drop, with the retest level of the rising trend line from 89.61 which was broken yesterday. The downtrend will be ok as long as we are below this level.

The Euro spent the whole last 24 hours above the important 1.3635 support, broke the 1.3734, and approached 1.38 again, reaching 1.3785 until the moment of preparing this report, 9 pips below Friday’s top. This behavior comes in agreement, with technical outlook that we have adopted in the past 2 days after 1.3635 survived the test.

But, the Euro was supposed to achieve more than this, and not to stop on the first barrier on the way up 1.3794. The most important support for the short term now is 1.3742, and holding above it is crucial in order to achieve more gains. But if broken, we will head to another test of the important 1.3635, and breaking it would topple the price to 1.3543.

Opposite to what is expected, the Dollar-Yen held above the support specified in yesterday’s report 90.02, and broke the resistance 90.47, but the movement was extremely limited, with the price topping at 90.66. We have adjusted the lines that frame the current area, to make the upper limit at Monday’s top 90.78, which is very close to last Wednesday’s top 90.80.

The Euro’s rally halted just above 1.38, and fell back fast & strong. As we can see from the attached chart, the Euro fell towards a very important support which is the lower trend line in the triangle that we talked about in the past few days. And as we can see on the chart as well, the price has already touched this line as well.

It seems as if the Dollar-Yen is trapped! And that it is stuck between the two limits we talked about in yesterday’s report, since we have not seen a break of either of them, as the price continued to trade marginally. Yesterday, we adjusted the lines that frame the current area, to make the upper limit at Monday’s top 90.78, which is very close to last Wednesday’s top 90.80.

The Euro retreated, breaking the support specified in Friday's report 1.3597, dropped as expected but settled for 1.3501, a whole 21 pips above the suggested target 1.3480. But what took place was a confirmation that reaching 1.38 has caused the Euro a lot of exhaustion. In addition to the fact that the "Reversal Day" pattern which took place on Wednesday was heavy on the pair. We can see on the attached daily chart that we are trading within a pretty harmonized channel, and it is exciting to see that the bottom of this channel is at 1.30, so are we heading there?

The Dollar-Yen approached the magnetic resistance 90.78 once again on Friday, as the daily high formed only 8 pips below it. The price did not move much afterwards, in a price behaviour reminding us of the boredom which we lived with this pair recently. Last week, we adjusted the lines that frame the current area, to make the upper limit at Monday's & Thursday's top 90.78, which is very close to last Wednesday's top 90.80, and close to Friday's top 90.70. The lower limit is provided by the rising trend line from 89.61 on the hourly chart, which has been tested several time, before being broken. This line is currently at 90.33.

The Euro broke the support specified in yesterday's report 1.3501, only to stop in the middle of the way to the target 1.3422, at 1.3462 in specific. This is the fifth time that the EURUSD reaches a daily low in the same area, without being able to break it. In Addition to yesterday's low, the Euro has bottomed in the neighborhood on: Feb 19th (low 1.3442), Feb 25th (low 1.3450), Mar 1st (low 1.3459) & Mar 2nd (low 1.3434). And after 3 weeks, we come back to the same area, as if we needed another bottom here to realize just how important this support area is.

The Dollar-Yen broke the rising trend line from 89.61, and the support specified in yesterday's report 90.33, dropped to 89.81, without being able to go lower than Thursday's low 89.74. This morning the price came back to test the broken trend line (please refer to the attached chart).

The Euro broke the support specified in yesterday's report 1.3502, and dropped a little, then it bounced back to stop accurately at the resistance specified in the report 1.3566 (the highest price after issuance the report is 1.3561). After that, the dropped & went back to confirm the 1.3502 break, and successfully reached the first suggested target 1.3422, reaching 1.3405 until the moment of preparing this report.

The Dollar-Yen moved in a very tight range between 90.17 & 90.60 without being able to break the most important resistance 90.78. Boredom is still the headline, awaiting a potential break of 90.78, or starting to drift away from it. Last week, we adjusted the lines that frame the current area, to make the upper limit at Monday's & Thursday's top 90.78, which is very close to last Wednesday's top 90.80, and close to Friday's top 90.70.

The Euro broke the support specified in yesterday's report 1.3390 , and dropped reaching the first suggested target 1.3326 successfully, before dipping below 1.33 for the first time since May 7th of last year. This collapse is completely expected, not only that, but we believe what we have seen yet is just part one of a strong and massive medium term drop which has already started! We will not be a bit surprised when we see the Euro below 1.30 in the near future, on the contrary, we look forward with eager to that. As for the short term, we may see a correction that retests the support area 1.3434-1.3462 before the weekend, and we may not!

After days & days of putting it under our surveillance, and pouring all our attention on it, the "magnetic" resistance 90.78 was broken and we have seen what follows the break of such important levels. The Dollar jumped strongly breaking the specified resistance in yesterday's report 90.78 & successfully reaching both suggested targets 91.60 & 92.31, stopping only 7 pips above the second target! With this break, the Dollar has released itself from pressure, and the direction of the Dollar in this pair could now agree with its direction against the European currencies, and we could end up seeing a board Dollar rally against all majors.

The Euro broke the resistance specified in yesterday's report 1.3441 and reached the first suggested target 1.3551 successfully, stopping only 8 pips above it. . The collapse which happened late last week is completely expected, not only that, but we believe what we have seen yet is just part one of a strong and massive medium term drop which has already started! We will not be a bit surprised when we see the Euro below 1.30 in the near future, on the contrary, we look forward with eager to that. But after dropping from 1.38 to 1.32 in a few days, a rising correction is normal & logical thing and holds no surprises.

Dollar-Yen traded below 93.75 for the whole past 24 hours, settling for a nearby top at 93.63. But, as we approach the important top 93.75, we recommend caution of a possible drop. Since it is pretty important, we will take 93.75 to be our "resistance of the day", and we do not expect this "correctionless" rise to continue unless it is broken. But if it does, the price will jump above 94 for the first time since August, targeting 94.35 and may get a taste of 95 as it targets 95.05.

Breaking the channel, and drifting away from 1.3606

The rising move for the Dollar against the yes stalled at 94.77 early in the new week. From that top a slow retreat has started, then a break of the rising channel on the hourly chart (shown on the attached chart). This is the most important even in favor of the Yen in the past 2 weeks. We expect this break to give a chance for the Yen to achieve gains and move this pair lower, even if that was for a correction. We can also see a falling trend line from 94.77, with which the price has touched 3 times so far. This is another sign that the short term trend is down (in addition to breaking the channel). Short term support is at 93.75, if broken the 94 adventure would have ended, even if temporary, and time for a correction will be here.

The Euro broke the support 1.3412 and fell as expected, but less than what is expected. The drop which followed was less than 70 pips, and did not reach the first suggested target 1.3283. But this sluggishness does not change the negative technical outlook.

And as we said yesterday, after such a break it is only normal for the Euro to enter in a bearish phase, for the short term at least. But approaching 1.3606 then breaking a rising channel could mean that we are entering a bearish phase on the medium term as well.

The Dollar-Yen did not fell below 93.75 much, ad came back to the habit that we have seen in the past few days, of making us bored to death, and failing to create any strong moves upon a break. Thus, we do not see much of a change in the technical outlook. Short term support is at January 8th top93.75, and if broken the 94 adventure would have ended, even if temporary, and it will be time for an overdue correction.

Targets for this break would be the most important support for the short term 93.12 & 92.10. As for the resistance it is at 61.8% Fibonacci resistance for the drop from 94.77 which is at 94.28 & breaking it would indicate a continuation in the slow advancement to target 95.05 & 95.94.

Support:
* 93.75: Jan 8th high.

The Euro broke the support 1.3355, but managed somehow to hold above 1.33. The fact that the Euro has traded above 1.33 after this break is a result of approaching a new channel's bottom. This channel which we present to you today on the attached chart, helped the Euro survive above 1.33, but will it succeeds in doing in doing so today? We see the most important support for short term is the nearby 1.3319, and breaking it would give the Dollar a push, driving this pair to new lows for this wave. We see that breaking this support will result in breaking 1.33 and then creating a strong move targeting 1.3212 and then 1.3113, as we approach the important 1.30 level. As for the resistance it is at 1.3356, and breaking it would indicate we are targeting the top of the channel at 1.3420.

The Euro broke the support 1.3355, but managed somehow to hold above 1.33. The fact that the Euro has traded above 1.33 after this break is a result of approaching a new channel's bottom. This channel which we present to you today on the attached chart, helped the Euro survive above 1.33, but will it succeeds in doing in doing so today? We see the most important support for short term is the nearby 1.3319, and breaking it would give the Dollar a push, driving this pair to new lows for this wave. We see that breaking this support will result in breaking 1.33 and then creating a strong move targeting 1.3212 and then 1.3113, as we approach the important 1.30 level. As for the resistance it is at 1.3356, and breaking it would indicate we are targeting the top of the channel at 1.3420.

The Dollar-Yen broke the support in yesterday's report 93.75, and stopped with stunning accuracy at the first suggested target 93.12 (the Asian session low, and the daily low until the moment of preparing this report is93.12). This proves the importance of this level which we described yesterday as very important.

The Dollar-Yen refused to engage in the extreme excitement seen on the Dollar/European currencies pairs, and kept its very calm relatively to the craziness we have seen on other pairs. The thing is that, the technical outlook has not changed for days. We are still trading very slowly in a correction to the up move which topped at 94.77, which is a correction that managed to reach its first target at 92.85. We are still watching for any other technical evidences to decide whether this correction has finished at Fibonacci 38.2% or that it is still going and will soon target Fibonacci 50% & 61.8% levels.

The Euro broke the resistance specified in Friday's report 1.3374 and successfully reached the first suggested target 1.3489. But what is more important is the gaps which took place at the new week's open, and managed to create a major technical event, which is breaking the medium term trend line, which is the line falling from 1.5139 on daily chart. This line, which we focused on all last week, is an important one, which managed to frustrate the Euro's attempts to rise for the past 3 months, and now it gives way, how much will that has an effect on the EURUSD? We can say that the Euro is finally free from downside pressure on the medium term, and that it will be shooting for areas hundreds of pips higher than current ones, in the next few days and weeks.

The Euro retreated from the post-gap top, and filled more than a third of the gap. This normal retreat after the sharp rise from 1.3281 has not done any harm for the technical outlook, since the price is still above the broken line with a comfortable margin. But the fragile consolidation above 1.3567 makes us expect more downside activity, immediately after it is broken. If this support gives way, the Euro will fall further, targeting two important levels: the first of which is the gap filling level at 1.3495, and the second has a huge importance for the short and may be medium term as well, since it combines Fibonacci 61.8% and the broken trend line which we said it is very important to stay above, in order to achieve more gains.

The falling trend line from 94.77 frustrated another attempt for the Dollar-Yen to rise, stopping it at 93.59. Then we saw the price obey the trend line and dropped almost 100 pips, entering the 92 areas. The thing is that, the technical outlook has not changed for days. We are still trading very slowly in a correction to the up move which topped at 94.77, which is a correction that managed to reach its first target at 92.85. We are still watching for any other technical evidences to decide whether this correction has finished at Fibonacci 38.2% or that it is still going and will soon target Fibonacci 50% & 61.8% levels.

The Euro tested the resistance we described as "important" 1.3675 with amazing accuracy, as yesterday's high was 1.3677. We still believe that 1.3675 is the key that can open the way for more gains. And still, the "fight" between this advancement and this resistance will be the deciding factor which will determine the direction that we will take from these levels. If the price manages to break the resistance, the rise will go on and get stronger as we see it targeting the important 1.3776 & if broken we will not be surprised to see 1.3861.

The technical outlook has not changed for days. We are still trading very slowly in a correction to the up move which topped at 94.77, which is a correction that managed to reach its first target at 92.85. We are still watching for any other technical evidences to decide whether this correction has finished at Fibonacci 38.2% or that it is still going and will soon target Fibonacci 50% & 61.8% levels. But, we now have a very important support which combines Fibonacci 50% with the rising trend line from 88.12.

The Euro broke yesterday's support 1.3437, and dropped approaching the suggested target 1.3340 and reaching a new bottom at 1.3357. What happened did not move our focus away from the descending channel we presented yesterday. And although there are a few pips outside the channel on both sides, this channel looks solid, and it deserves our attention. As we can see on the attached chart (the hourly chart), there is a descending channel with two bottoms on its lower trend line. This channel is the guardian of the falling trend, and its top at 1.3427 provides the most important resistance. If the price stays under this level, and continued to trade within the channel, more ownside activity is to be expected.

After holding close to 91.66 on Monday, the price started to rise from this Fibonacci support, and continued all the way until it achieved the "surprise" and started trading above the previously broken trend line. This very strong rise from the bottom which came only 8 pips below Fibonacci at 91.66, indicates that the trend is up. But, the return of the price to trade below this line once again today, is really puzzling. Thus we have no choice but to focus on short term levels without any prior bias. Short term support is at 92.72, and if broken we will test last Friday's low 91.89, and then the previous important resistance 90.78. While the resistance is still where it was in the past few days at 93.61, and we do not recommend cheering for the Dollar before breaking it.

The Euro broke the resistance specified in Friday's report 1.3300,
and created what we considered a "surprise" with this break, then it
successfully reached the first suggested target for this break 1.3387.
Our target has turned into today's resistance, since it managed to stop
the rise from 1.3200 (Friday's high was 1.3398). The issue for today is
whether Fibonacci 38.2% will continue to hold in front of this strong
climb which achieved almost 200 pips in less than 24 hours, or will it
give way to more gains? The first scenario, which we slightly prefer is
for Fibonacci to hold, and for the price to start drifting away from it,
and finally to break short term support 1.3334. IF this level is

Although the Euro has touched the 1.34 areas, it did not hold above
1.3387, even after trying twice, it went back to fall in both cases. And
although it reached 1.3414, the issue for today is still whether
Fibonacci 38.2% will continue to hold in front of this strong climb
which achieved almost 200 pips in less than 24 hours, or will it give
way to more gains? The first scenario, which we slightly prefer is for
Fibonacci to hold, and for the price to start drifting away from it, and
finally to break short term support 1.3337. If this level is broken,
the drop will be hard, and will target approaching last week's low, and
the lowest level since Apr 30th 2009 which was 1.3200, since we notice
an important intraday support at 1.3204. If we fall further, 1.3113 will

The Dollar-Yen retreated from this week's top 94.34 back to 93.72, pips above the important resistance which was broken on Friday 93.62. With the break of this important resistance, after days of waiting, it immediately turned into the most important support. It is crucial for the Dollar to preserve gains and hold above this support/resistance in order to achieve more gains. If we hold above it, the price will have another chance to rise, which is a rise that should go through the 94.18 gate, the most important intraday resistance. If this one is also broken, we will reach the 95 areas for the first time since August, since the targets for such a break are 95.05 & 95.90.

As expected, the scenario we slightly preferred is the one which happened, which we said yesterday that it includes the price to start drifting away from it, and break short term support 1.3337. The price broke the specified support in yesterday's report 1.3337, and successfully reached the first suggested target 1.3204, and it came sort of close to the second suggested target 1.3113. Thus, there is no change on the technical outlook , we still believe that this downtrend is capable of breaking the 1.30 landmark, and go into the 1.20s for the first time in a year. But, after yesterday's plunge we could see a rising correction, which should stay inside the channel drawn on the attached chart.

The Dollar-Yen continued to retreat from this week's top 94.34 back to 93.72, breaking the important resistance which was broken on Friday 93.62, and dropping to 92.80, that's 24 pips before our suggested target for this break. After rising back above 93, the resistance 93.33 showed some strength, stopping the price from going up 3 times. But there are more important levels to focus o. The support is at 93.01, breaking it means a continuation of the drop, and looking for targets below 92.80, we see the test of the rising trend line from 88.12 as the most notable target for this break. We have modified this trend line, and it is currently running at 92.29. A break here will immediately target 91.58.

The Euro broke the support specified in yesterday's report 1.3188, and successfully reached the first suggested target 1.3113 with unbelievable accuracy (Yesterday's low was 1.3113 EXACTLY). Although the price bounced back above 1.32 (confirming the importance of 1.3113), but there is no change on the technical outlook , we still believe that this downtrend is capable of breaking the 1.30 landmark, and go into the 1.20s for the first time in a year.

We would completely abandon our focus on 93.62, after the price broke it several times without being able to create a decisive move in any of the times it broke this previously important level. We will focus on analyzing the rising move from 92.80, which seems to be doing good. This move has reached 94.30 so far, and it stopped in the same area as Monday's rise, when the high was 94.34. Thus, 94.30 will be our resistance for the day, breakingit would give us a chance to finally seethe long awaited 95 area, where there are several important levels we like such as 95.05 & 95.90.

The Euro broke the support specified in yesterday's report 1.3173, and completely collapsed reaching both suggested targets 1.3113 & 1.3050. It even dropped more than 100 pips below our second target, dropping below the 1.30 for the first time since Apr 28th 2009. It was obvious, even before this recent drop, that the technical picture is negative, which we have expressed clearly in yesterday's report. But, the pace of this drop has exceeded our expectations. If we try to explain what happened, it could be a 5-wave drop which is still developing, out of which we are in the 3rd wave. And since wave 4 could be a sharp correction or a horizontal one, we must be extra cautious around here.

The Dollar's rise stopped at 94.96, that's 9 pips below our resistance 95.05, then it dropped, to leave us wondering is this everything? Is the short term rise over, or will it go on? Everything depends on breaking 95.05 or holding below it. If we hold below this resistance the price will be expected to fall, and test the rising trend line from 92.80 at 94.56. If broken the technical outlook will turn negative for the short term, and we will target the important support 93.91. If this one is broken, the technical outlook will turn negative for the medium term, and we will target 93.30 as a first and modest target for this break, on the way to lower levels later.

The Euro fluctuated before breaking the support 1.2948, surpassing both the resistance & supports with about 10 pips each, fooling us that there is a break, only to frustrate us with a move in the opposite direction. Then, it made up its mind, and broke 1.2948, falling & reaching both suggested target 1.2885 & 1.2820. Today, the price is still trading below the falling channel, clearly, and that leaves us with no reason to change the negative technical outlook (even after a drop of 550+ pips). In fact, this outlook will not change unless we go back to trade inside the channel, which is something that needs a break of the resistance 1.2935 to happen. Before this important resistance, there is short term resistance at 1.2854, this is the one we will focus on for today.

The Dollar/Yen broke the support specified in yesterday's report 94.56, and successfully reached the first suggested target 93.91, and stopped halfway to the second target 93.30. What is more important than this is that the price has broken both the rising trend line from 92.80 & 91.58. This very important event has turned the technical outlook negative. Thus, we expect the sliding to go on for another day, but it needs to go through the 93.62 gate. If his support is broken, everything will go ok for the downtrend, and the next set of targets will be 92.97 & the important 92.13. On the other hand, the most notable resistance is at 94.01, we do not expect it to be broken at this stage, such a break would make a "small surprise".

The Euro broke the support specified in Friday's report 1.2735, and we saw the price drifting away from the channel bottom, reaching both suggested 1.2854 & 1.2935 successfully. The most important technical event in the past week was not the exciting collapse, but reaching the bottom of the falling trend channel on the daily chart (please refer to the attached chart). And after a rebound of almost 450 pips, this bottom has proved important. We could be in front of a turning point not just for the short term but for the medium term as well.

The Dollar/Yen's rise from 87.99 has slowed down significantly, after rocketing for more than 500 pips in less than 18 hours! But now we have come back from excitement to boredom, the good news is that the important levels are much closer to each other than it was on Friday. The resistance is at 92.83 & the support is at 92.46. We will be waiting for one of these two levels to give way. If 92.46 gives way, a correction for this rocking jump will start, with its first target at 91.22 and the second important target is at 90.61. The resistance is at 92.83, and if broken the price will jump to the resistance that we find very attractive 93.96. If this one is also broken, 95 will become near, as we will target 95.05.

The Euro broke the support specified in yesterday's report 1.2706 and successfully reached the first suggested target, stopping only 4 pips below it! Today, yesterday's target have turned into the most important support, because it managed to stop the latest episode of the falling series which started close to 1.3105 Fibonacci level that we have talked about previously. If the price holds above this support, it will finally have a break, and we could see a rising correction after this drop of more than 500 pips in less than 48 hours! Today's resistance is at 1.2693, and breaking it would indicate we are already in a rising correction for the whole drop from 1.3092.

The Dollar/Yen's is back to slow, small, and boring moves! It barely completed 90 pips from the low to the high in the past 24 hours, which is very frustrating. Today's important levels are close to each other. The resistance is at 92.87 & the support is at 92.30. We will be waiting for one of these two levels to give way. If 92.30 gives way, a correction for this rocking jump will start, with its first target at 91.40 and the second important target is at 90.75.

The resistance is at 92.87, and if broken the price will jump to the resistance that we find very attractive 93.96. If this one is also broken, 95 will become near, as we will target 95.05. In the next few days, important evidence on medium term direction will emerge, and we will be on the watch for them.

The Euro broke the resistance specified in yesterday's report 1.2693, but could not climb more than 45 pips after that, before tumbling down & approaching 1.26. But this decline, has found our favorite support which we talked about yesterday, waiting! The drop stopped at 1.2610, only 2 pips above the all important 1.2608. Today, this support will still be the most important support, because it managed to stop the drop twice: the first late in Tuesday's Asian session, and the second shortly after the US markets closing on Wednesday. If the price holds above this support, it will finally have a break, and we could see a rising correction after this drop of more than 500 pips in less than 48 hours!

The Dollar/Yen's slow rise, has stopped accurately at the previous support 93.27 as you can see on the attached chart. But, the most important resistance around here is still 93.49. Here is where all out attention must be placed. After several extremely boring days, which no meaningful moves at all, we could see excitement back in the game, if this level s broken. In this case, the price will not target the attractive 93.96, but it will not settle for anything below 94, where the well known support/resistance area 94.31 will be waiting, to act as a first target for this break. If the climb goes on it will shoot for 95.05. On the other hand, the support is provided by the rising trend line from 90.83 on intraday charts, which is a line that has supported the price for six days now.

The Euro broke the Support specified in Friday's report 1.2608 and dropped hard, reaching both suggested targets 1.2511 & 1.2455 with complete success, and even dropping more than 200 pips below the latter. This new collapse is just another part in this downtrend that won't get tired! It has reached the lowest level in 4 years, and it seems like it is targeting the psychological level 1.20 on the short term, probably during this week. Today's support is at 1.2254, and breaking it would indicate a continuation of the drop, and of this brutality of the Dollar towards the Euro. The targets for such a break if it happens will be 1.2113 then the psychological level 1.2000.

The Yen is trying to hold on in face of a strong Dollar, It is trying to achieve some gains, not caring about how brutal is the Dollar treating the European currencies. The Yen managed to push the Dollar lower, to break Friday's support 93.07, and fall more than 100 pips after that, but without reaching our suggested target 91.40. The question now is: Could the Yen go on with outperforming the Dollar? In order to do so, it needs two things: to hold under the resistance 92.40 & to break the support 91.79. If we break the support 91.79 the Yen will stay in the lead in this game, and will drag the Dollar to 2 important levels 90.75 & 90.09. The latter is an important level for both the short & medium terms.

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.

The Euro broke the resistance specified in yesterday’s report 1.2223, and successfully reached both suggested targets 1.2327 & 1.2412 with a perfect triumph. This climb is probably the first part of a massive rising movie, which will be correcting the latest series of collapses, which started at 1.3690 & smashed the Euro for more than 1500 pips in a few weeks. Today, will be a very important day for determining the value of this possibility. If the price goes up from here, this will indicate a correction for that massive move down from 1.3690, which will be able to take us to the 1.27-1.31 area within the next 2 weeks.

Dollar/Yen broke the support specified in yesterday’s report 91.79, and dropped by almost 100 pips, getting very close to our suggested target 90.75, without reaching it (The lowest price for the past 24 hours is 90.84). Stopping at this bottom is actually stopping at Fibonacci 50% level for the whole rise from 87.99 to 93.62. Therefore, we are before a very important level, which will be our “support of the day”. If broken, the drop will continue, and will target a very important level at 90.14, and if this one is also broken, we will target 89.61. On the other hand, resistance is at 91.50, and breaking it would improve the negative technical outlook for the short term, probably slightly.

After the rocketing rise, from 1.2142 to 1.2670 late last week, the Euro retreated back to 1.2480. This drop has came very close to the rising trend line from this cycle’s low on the hourly chart 1.2142, which is currently at 1.2492. We believe that a break of this line (in case it happens) will be the technical event of the day. We can not just guess the direction before the test of this line. The general trend is down, but the rise from 1.2142 has shown enormous strength. In such a case, waiting for the test of the trend line is the best thing one can do. In case this support is broken the rocketing short term trend will be over, and the Euro will be back to falling, and going along with the general trend. Today’s targets will be 1.2406 & then 1.2295.

The dollar started to balance itself above 90 in the past few hours, and it became in a good position to “attack” the falling trend line on hourly chart. This line is currently at 90.32, only pips below the current price. Will we see the Dollar breaking this line and rocketing up? Today, Dollar’s strength will completely depend on its ability to break the resistance 90.32. If the Dollar can push the Yen above this resistance, we will witness a strong rise, targeting

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.

The Dollar failed to capitalize on its consolidation above the 90 landmark, and gave up to the Yen at 90.60, then dropped more than 100 pips to reach the support specified in yesterday’s report exactly (the support was 89.56 & today’s low until the moment of preparing this report is 89.56).Today, Yen’s strength will completely depend on its ability to break the support 89.56. If the Yen can push the Dollar Below this level, we will witness a strong drop, targeting the same set of targets we suggested in the last 2 reports: 88.96 & 87.99. The resistance is at 90.23 and breaking it (if it happens) will target Fibonacci retracement levels 91.24 & 91.89. The latter is the most important resistance for the short (and may be medium) term for now.

Although the Euro broke the support specified in yesterday's report 1.2256, and fell afterwards by 80 pips, it came back to break the resistance specified in the report (opposite to our expectations), and traded above it after the American closing, but it was not ale to hold this high! This strong bounce, did not break any important levels (so far), to the degree that we can say that the negative technical outlook has changed. When analyzing the 4-hour chart, we can see a beautiful channel, with the price trading in the middle of it at the moment. We can also see that the whole movement of yesterday was in the middle of this channel, and it did not touch or even approach the top or the bottom of the channel.

More semi-horizontal movement, making us gradually lose hope to feel some excitement coming from this boring pair! But, there is a slowly rising channel on the hourly chart, which contained all the previous days' shallow moves. It is a coincidence that short term 38.2% Fibonacci level at 90.74 is at the top of this channel, which gives it more importance. The bottom of this channel is at 89.37, and will be slowly rising to 89.56, the well known support. Today's main levels are support 90.14 & resistance 90.74, we can only hope to see some action upon a break of one of them. If we break the support 90.14, we expect to test the bottom of the channel 89.37 first, then to drop to 88.96 on the way to lower targets for the break of this channel.

The Euro broke the support specified in yesterday’s report 1.2256, and fell afterwards by 104 pips, only to stop before our suggested target & the 4-year low 1.2142. And after finding a bottom at 1.2152, the price bounced almost 150 pips in 8 only hours! This strong bounce, did not break any important levels (so far), to the degree that we can say that the negative technical outlook has changed. When analyzing the 4-hour chart, we can see a beautiful channel, with the price trading in the middle of it at the moment. We can also see that the whole rising move from 1.2152 was in the middle of this channel, and it did not touch or even approach the top or the bottom of the channel. Today, we will favor Fibonacci 61.8% over the top of this channel.

Although the price approached our resistance 90.74, and stopped only 9 pips below it, we have seen nothing but more semi-horizontal movement, making us gradually lose hope to feel some excitement coming from this boring pair! But, there is a slowly rising channel on the hourly chart, which contained all the previous days’ shallow moves. The channel’s top is just above short term 38.2% Fibonacci level at 90.74, making this resistance the most important for now. The bottom of this channel is at the well known support 89.56. Today’s main levels are support 90.09 & resistance 90.74, we can only hope to see some action upon a break of one of them.

The Euro tried to approach the all important resistance 1.2472, but it topped at 1.2451, and then it went back to drop again, breaking the rising trend line on the hourly chart. We still believe that the most important resistance is Fibonacci 61.8% at 1.2472! We do not see any reason to change our negative technical outlook for as long as the price is below it. And since that the price has touched the channel top, and came close to Fibonacci then it started to fall, then the negative outlook is still here, strongly! As for the short term the support is at 1.2283, and breaking it will drag the Euro to the important 1.2152 then to a new cycle low at 1.2068.

The Dollar/Yen reached 91.59 after the open of the new week, and we could see the price targeting the most important resistance for now: Fibonacci 61.8% for the short term at 91.84, which is the separating level between a positive & a negative medium term outlook. If price stops at or around 91.84, the odds of going back down will be enormous, and a top around here could provide us with a wonderful chance to sell for medium term. But if broken, we will see a strong jump to 92.95 and may be 93.65. Support is at 90.95, and if broken, the price will retreat to 90.26 then to the very important 89.67. We still believe that 91.84 is still the most important medium term resistance for now, while the medium term support is at 89.67.

Support:

The Euro traded below the resistance specified in yesterday’s report 1.2333 for the whole 24 hours since the issuance of yesterday’s report. It did not break it, only to trade in a narrow range, which has postponed the drop but did not delete its possibility. We still believe that the Euro is ready to dive, and we still believe that the most important resistance is Fibonacci 61.8% at 1.2472! We do not see any reason to change our negative technical outlook for as long as the price is below it. And since that the price has touched the channel top, and came close to Fibonacci then it started to fall, then the negative outlook is still here, strongly!

The Dollar/Yen retreated a little bit, and consolidated around 91, but we still believe that we could see the price targeting the most important resistance for now: Fibonacci 61.8% for the short term at 91.84. But in order for it to hold to these chances, the price should hold above the 90.87 support, and not to start drifting lower and away from 91! The resistance 91.84 is the separating level between a positive & a negative medium term outlook. If price stops at or around 91.84, the odds of going back down will be enormous, and a top around here could provide us with a wonderful chance to sell for medium term. But if broken, we will see a strong jump to 92.95 and may be 93.65. Support is at 90.87, and if broken, the price will retreat to 90.26 then to the very important 89.67.

The Dollar/Yen came closer than ever to the all important resistance 91.84, stopping only 8 pips below it, which could be considered as a test of some sort! But we still believe that there is a chance to come even closer to this important level on the short term, and that we could actually “touch” it before we drop! But in order for it to hold to these chances, the price should hold above the 91.24 support, which is provided by the rising trend line on intraday charts. And although we notice that this is an important level, the resistance 91.84 is still the most important level for this pair right now! It is the separating level between a positive & a negative medium term outlook.

The Euro dropped strongly, as it broke the support specified in yesterday’s report 1.2283, and successfully reached the first suggested target 1.2142, and a new cycle low(just as expected) at 1.2110, which is a level not seen since 2006! We expressed confidence in this scenario in yesterday’s report, when we said “we still believe that the drop to a new cycle low below 1.2142 is only a matter of time”. And even after this “dive”, we still believe that the Euro is ready to dive even more, and we still believe that the most important resistance is Fibonacci 61.8% at 1.2456! We do not see any reason to change our negative technical outlook for as long as the price is below it.

In what may be considered some kind of a surprise, the Euro broke the falling channel on the hourly & 4-hour charts at 1.2270 during the Asian session! This break could cause a lot of excitement before the weekend. It is only logical to expect more rise after this break.

But we will not put our bets on it, before breaking the last top inside the broken channel, which was 1.2351. This is for the short term, but for the medium term, the Euro will stay weak until it breaks 1.2456 in a real and decisive way. So, today's resistance is at 1.2351, and only after a break here we would expect a continuation of the rising move. If this break happens, the first target will be a test of the single most important resistance for the time being 1.2456.

Finally, the Dollar/Yen reached the long awaited 91.84! But the surprise was that it broke it, easily, and managed to reach 92.34 (today's high until the moment of preparing this report). This break will improve the weak technical outlook on the short term. But reaching the top of rising trend channel on the hourly & 4-hours charts indicates that the Dollar will face difficulties in its struggle to achieve more gains (please refer to the attached chart).

As expected, the Euro broke the support 1.2152, and successfully reached both suggested targets 1.2068 & 1.2000. The Euro fell below 1.20 for the first time since March 2006, but this drop was not a surprise to anyone, according to the negative technical outlook which we have adopted in the past days & weeks. Breaking below 1.20 opens the door for guessing the long term targets in these areas, the question now is where are these targets? In our opinion, we believe that there is one target, one point, which stands out of the crowd, and that is 1.1211, which will be our target for the next few weeks. The importance of this level is that it is the 61.8% Fibonacci for the whole move from the historical low to the historical high.

The Dollar/Yen stopped just before 92.95 (Friday’s high was 92.87), and started to drop, drifting away from this new challenge which it’s obviously not ready for yet! The price then dropped, breaking the support specified in the report 92.22, and reaching the first suggested target 91.36 successfully. The current drop stopped just before the Fibonacci 50%for the short term at 90.90 (the low until the moment of preparing this report is 90.90). This indicates that this level is important for stetting the direction of the short term. If the price holds above this level we believe it can challenge Friday’s top, and the important resistance 92.95, if not today then later in the week.

Crude oil slumped as the dollar strengthened and a lower-than-expected monthly growth in US non-farm payrolls slightly dampened optimism about the nation's economic recovery. China's main ports imported 17.29 million tonnes of crude oil in May, or 4.07 million barrels per day, up 12.8 percent from a year earlier but down 7 percent from April. Now support for the crude is seen at 3351 and below could see a test of 3339. Resistance is now likely to be seen at 3387, a move above could see prices testing 3411.

Trading Ideas:

Crude trading range is 3339-3411.

With astonishing accuracy, the Euro’s drop stopped at the support specified in yesterday’s report 1.1911, down to the pip! And then tried to reach 1.20, but it settled for 1.1989. Breaking below 1.20 on Friday has opened the door for guessing the long term targets in these areas, the question now is where are these targets? In our opinion, we believe that there is one target, one point, which stands out of the crowd, and that is 1.1211, which will be our target for the next few weeks. The importance of this level is that it is the 61.8% Fibonacci for the whole move from the historical low to the historical high.

The Dollar/Yen held above the support specified in yesterday’s report 90.90 (yesterday’s low was 90.96), and it rose to break the resistance 91.59, and stopped before the suggested target 92.15 with only 8 pips! This surely indicates the importance of this level, which we will adjust today with a single pip to 92.14. This resistance will be in the center of our attention. On the other hand, the support is at 91.54, provided by the rising trend line from 90.96 on the hourly chart. If the price manages to hold above this support, we believe in its ability to test Friday’s top and the important 92.95, if not today, then later in the week.

The Euro fluctuated and penetrated both the support & the resistance specified in yesterday’s report without being able to reach any of the suggested targets in both cases. This behavior enhances our hypothesis that we are in a wave 4 of a 5-wave decline, since its known in (The Wave Principle) that wave 4 price action appears to be random while this wave is developing, just as it is the case for wave B as well. Breaking below 1.20 on Friday has opened the door for guessing the long term targets in these areas, the question now is where are these targets? In our opinion, we believe that there is one target, one point, which stands out of the crowd, and that is 1.1211, which will be our target for the next few weeks.

The Dollar/Yen traded below 92.14 for the whole past 24- hours, and did not touch this important resistance. It also dropped to break the support specified in yesterday’s report 91.54, only to settle for 91.23. This very limited action, has postponed the excitement, hopefully for no longer than today, especially after a critical level has appeared this morning, catching all of our attention. This level is the support at 90.52. The reasons which makes this level a shining star standing out is that it combines the rising trend line from May 20th, with June 1st low, giving this level a double importance. But, before we can test this level, we need to break the intraday support 91.11. And if we do, we will drop to test this very important (and hopefully very exciting) level.

The Euro broke the resistance 1.2127 which we said that it “will be very positive for the short term”, and successfully reached the first suggested target 1.2176, confirming the “break of the downtrend” which we talked about on Friday. There is no doubt that the Euro has broken the trend, but that is only for the short term. We should not confuse this actual trend break and the change in direction for the short term, which the persisting downtrend for the medium term which is still going strong. This break has passed the first challenge on Friday by breaking 1.2127, but it is invited to another equally important challenge at 1.2214 today. If the Euro is to continue with its rise, it should break this resistance and should not stop at or near it.

Dollar/Yen broke the resistance specified in Friday’s report 91.65, but it barely made it to 92 (the high at the moment of preparing this report is exactly 92.00), which makes us wonder if we will see results to this break. We are full of hope to see some excitement today, as we are betting on the Dollar to capitalize on the break of the falling trend line from last week’s high. And if it breaks the resistance 91.91, that would be probable, and we would be looking forward to reach the 92.56 & 93.62 targets. Having said that, the possibility of a drop remains, but it now needs a break of the support 91.60. If we do, we will target a critical level has appeared this morning, catching all of our attention for the past 3 days. This level is the support at 90.65.

The Euro broke the resistance specified in yesterday’s report 1.2214, and successfully reached the first suggested target 1.2295 with stunning accuracy (yesterday’s high was 1.2296). After that, the single currency dropped for more than 100 pips so far, which confirms what we have said that we should not confuse this actual trend break and the change in direction for the short term, with the persisting downtrend for the medium term which is still going strong. This retreat, from a well known resistance & a target area means that the “hot” rise for the Euro is going cold! If we break the short term support 1.2187, the Euro will probably give up the latest gains.

Dollar/Yen broke the resistance specified in yesterday’s report 91.60, but it did not make it to 91(the low at the moment of preparing this report is 91.14). The most important technical event for the past 24 hours was the fact that the descending trend line from last week’s top has got very close to the rising trend line from may 20th low, and it seems as if they are touching at the important 90.96. This makes this support the single most important support without a shadow of a doubt! It seems as if we are about to test it, and we suggested keeping an eye at this pair as it gets closer to this level, because this very test is what will determine and set the short term direction.

The Euro broke the resistance specified in yesterday’s report 1.2254, and successfully reached the first suggested target 1.2295 and came very close to the second suggested target 1.2352, stopping only 4 pips before it (yesterday’s high was 1.2348). The Euro proved that it is still capable of going higher, which created a small surprise for us. Yesterday’s top came very close to this month’s top, which was reached on the first day of it: 1.2352. This proves how important this resistance is, that is why it will be our resistance of the day. After hitting yesterday’s top, the price retreated to 1.2307. This retreat, from a well known resistance & a target area means that the “hot” rise for the Euro is going cold!

With stunning accuracy, The Euro’s rising move stopped at the resistance specified in yesterday’s report 1.2352 (yesterday’s high was 1.2351), and then, just as expected, the drop began. The price then broke the support specified in yesterday’s report 1.2307, only to settle for 1.2253! The rising move halted very close to this month’s top, which was reached on the first day of it: 1.2352. This proves how important this resistance is, that is why it will be our resistance of the day, especially after it managed to send the price down for almost 100 pips. This retreat, from a well known resistance & a target area means that the “hot” rise for the Euro is going cold! If we break the short term support 1.2255, the Euro will probably give up the latest gains.

With supernatural accuracy, the Dollar/Yen stopped at the support specified in yesterday’s report 91.06 (yesterday’s low was 91.07), and traded above it for the whole time after. Stopping here is in fact a test at the ascending trend line from May 20th low, a very accurate test actually (please refer to the attached chart). This makes this support the single most important support without a shadow of a doubt! This line is currently running at 91.17, and it will be our support of the day. And after such an accurate test, we suggest keeping an eye on this pair, because this very test is what will determine and set the short term direction. If we break 91.17 the price will drop hard, to 89.81 first, and then to 88.96, both levels are significant and critical support levels.

The Euro broke the support specified in yesterday's report, the important 1.2389, and dropped back below 1.23, hitting 1.2282 during the Asian session, but without being able to reach the suggested target 1.2240. When looking at the attached chart, we immediately realize that this retreat 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 was tested twice 1.2282, will be support of the day.

The Dollar/Yen successfully jumped to the broken trend line we talked about previously, and performed a classic retest move, very accurate, before dropping 75 pips, in yet another confirmation that the bears are beating the bulls! With this classic retest, the break of the rising trend line from May 20th will continue to have a tremendous effect on the short term direction, and may be the medium term as well. But, we need a break of today's support at 90.75 to say that we are on the way to the same set of targets we suggested yesterday. Meaning, if we break 90.75, we will target 89.81 first, and may be 88.96 later.

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.

The Dollar/Yen continued to drop slowly, in yet another confirmation that the bears are beating the bulls! With the latest moves, the break of the rising trend line from May 20th will continue to have a tremendous effect on the short term direction, and may be the medium term as well. But, we need a break of today’s support, the support which stopped the drop twice on Monday & today’s Asian session at 90.32 to say that we are on the way to the same set of targets we suggested yesterday. Meaning, if we break 90.32, we will target 89.81 first, and may be 88.96 later. On the other hand, it is required to keep trading below the falling line descending trend line from June 14th high, in order for the negative technical outlook to keep prevailing.

After its break of the small descending channel, the Euro reached its target for this break which is a test of the top of the main descending channel for the 3rd time! It touched, and slightly surpassed, the top of this channel (please refer to the attached chart). There is nothing more important than this test, for the short, and medium terms! But, we need a confirmation of this break: first we need the Euro to keep trading above the top of the channel, and then we need it to break the Asian session high 1.2396. If the Euro manages to provide what is needed, we will completely change our negative outlook for this pair. This is why today’s levels will be support at 1.2358 & resistance at 1.2396.

The Dollar/Yen continued to drop slowly, in yet another confirmation that the bears are beating the bulls! USDJPY broke the support specified in Friday’s report 89.40, and reached a new bottom for this recent falling trend at 89.20. This confirms the negative technical outlook we have seen lately. And we believe it will persist as long as we are trading below the falling trend line from June 14th top, which is currently at 90.86. Short term support is at 89.20, and breaking it will be another evidence that we are going down. This break will target 87.99 & 87.35. Last week’s important support at 90.32 will turn into a resistance for today.

The Euro broke the support specified in yesterday's report 1.2358, and dropped as expected, and reached the first suggested target 1.2260, successfully! What is funny, is that the Euro dropped more than 150 pips from the top it reached after this week's open, while the Pound reached a 7-week high above 1.51, and consolidated just below it. Therefore, it is hard to channel the direction of the European currencies against the greenback, and this in itself calls for caution. In the case of the Euro, its fall to meet our suggested target at 1.2260 is a negative sign for the short term without a doubt, If added to the fact that this drop came after the failure to break the top of the descending channel, we can see that this is also negative for the medium term as well.

The Dollar/Yen continued to drop slowly, a bit faster than usual this morning, in yet another confirmation that the bears are beating the bulls! USDJPY broke the support specified in yesterday's report 89.20, and reached a new bottom for this recent falling trend at 88.59 without being able to meet our suggested target 87.99. This confirms the negative technical outlook we have seen lately. And we believe it will persist as long as we are trading below the falling trend line from June 14th top, which is currently at 90.64. Short term support is at 88.67, and breaking it will be another evidence that we are going down. This break will target 87.99 &

The Euro stopped ahead of the resistance specified in yesterday’s report 1.2563 (the high for the past 24 hours is 1.2556). Later, it dropped, breaking the support specified in the report 1.2527, and went down as expected, but only to find another support at 1.2479, standing between it & its target at 1.2451. The most important technical event, was approaching the top of the rising channel on the hourly chart on Friday. We could be before an important turning point at 1.2609, since we saw the price falling away from this level yesterday. We should carefully watch the top of this channel, which is at 1.2656 currently. We will not be able to escape the fact that a break here will be a very positive signal for both the short & medium terms.

In spite of the obvious trend line break to the upside, we have not seen a reaction to match the importance of this break until this moment. But fear not, this does not change the positive technical outlook for this pair. We still believe in the possibilities of a strong bounce. With this consolidation around 88, and after bouncing from the support area shown on the hourly chart below, and after clearly breaking the falling trend line from June 21st top (please refer to the attached chart), we think that the possibility of a bounce is rising, even if that was for a correction. Short term support is at 87.57, and breaking it would indicate a continuation of the drop to 86.95 & 86.47.

The Euro broke the resistance specified in yesterday's report 1.2603, and successfully reached the first suggested target 1.2681 with a very good accuracy since yesterday's high was 1.2686. The most important technical event, was touching the top of the rising channel on the hourly chart for the third time during the Asian session, after touching it for the first time on Friday, and the second on Tuesday. We could be before an important turning point at 1.2686, but until this moment we have not got far from the top of the channel. We should carefully watch the top of this channel, which is at 1.2690 currently. We will not be able to escape the fact that a break here will be a very positive signal for both the short & medium terms.

Our waiting finally paid, as we finally saw the Dollar/Yen sharply bouncing as we have expected, and as we have been waiting for. The Dollar/Yen broke the resistance specified in yesterday's report 87.72, only to reach 88.44(the high at the moment of preparing this report). This sharp bounce came as no surprise, with the consolidation around 88, and after bouncing from the support area shown on the hourly chart below, and after clearly breaking the falling trend line from June 21st top. Short term support is at 88.19, and breaking it would indicate a continuation of the drop to 87.35 & 86.47.

The Dollar/Yen continued to rise, reaching 89.13, but at a much slower pace that we have seen on Wednesday. This slow bounce came as no surprise, with the consolidation around 88, and after bouncing from the support area shown on the hourly chart below, and after clearly breaking the falling trend line from June 21st top.

The Euro broke the support specified in Friday’s report 1.2677, and dropped to 1.2607 before it continued its way down after the new week’s open to 1.2578 (today’s low at the moment of preparing this report). The rise topped at
1.2720, in what turned out to be the most serious test of the top of the rising channel on the hourly chart.

The drop which followed the open, raised the possibilities that we could be before an important turning point at the channel top, specially after dropping from Friday’s high 150 pips so far. As we said in our last report: “We will not be able to escape the fact that a break here will be a very positive signal for both the short & medium terms.

The Euro did not decisively break the support or the resistance specified in yesterday’s report: it stopped 4 pips above the resistance specified in the report, and then found a bottom only 2 pips below the report’s support. The price topped at 1.2720 on Friday, in what turned out to be the most serious test of the top of the rising channel on the hourly chart. The drop which followed the week’s open, raised the possibilities that we could be before an important turning point at the channel top, especially after dropping from Friday’s high 150 pips so far. As we said in our last report: “We will not be able to escape the fact that a break here will be a very positive signal for both the short & medium terms.

The Dollar/Yen retreated a little bit, and found a bottom at 88.37. As we have explained several times, it seems that we are in a wave 4 correction now (please refer to the attached chart), which will ideally target a Fibonacci ratio of the wave 3 dive. But the important question now is this: is the 4th wave correction done? yesterday’s close produced a shooting star pattern on the daily chart, making us believe that this correction is probably over! Short term support is at Friday’s top 88.37, and breaking it would indicate a continuation of the drop to 87.35 & 86.47. The resistance is at 88.76, and breaking it would mean that the Dollar will continue to capitalize its latest bounce, which will ideally target Fibonacci levels for wave 3: 89.52 & 90.13.

Although the Euro broke the support specified in yesterday’s reports 1.2889, but it did not reach or even come close to the suggested target 1.2820, as if it was still not ready to drift away from 1.30 yet. On Friday, the Euro topped at

After the Yen’s strength penetrated the lows of last December & January, we were left with no notable support protecting the 15-year low which was reached last November at 84.81! We will not be a bit surprised if this pair started to move in that direction, and tried to break that low! On the contrary, we have been expecting this for weeks now, and it was included in our reports several times. But, signs show that the possibility of a rising correction is growing, to correct the drop from Wednesday’s top 89.09 to Friday’s low 86.25. On the top of these signs: the inverted hammer formation, which appeared on the daily chart. Therefore, and even though we are negative about this pair on the medium term, we should not neglect these signs which force themselves upon us for today!

Although the Euro penetrated 1.30 and reached 1.3026, it dropped hard, breaking the support of yesterday’s report 1.2952, and bottoming just ahead of our suggested target and at 1.2838. With that, we have even more evidence of a reversal, most important factors in this conception are: 1. No daily close above 1.2997 & 2. A “reversal day” pattern for yesterdays bar/candle on the daily chart. This shows just how important the area around 1.30 is, which is probably the level most qualified to turn the Euro around, and resize this soaring move into a correction! This strong & sharp jump is a natural fruit of breaking the top of the channel after touching it for a record number of times, but eventually the Euro managed to break it!

No change for yesterday’s outlook, after the Yen’s strength penetrated the lows of last December & January, we were left with no notable support protecting the 15-year low which was reached last November at 84.81! We will not be a bit surprised if this pair started to move in that direction, and tried to break that low! On the contrary, we have been expecting this for weeks now, and it was included in our reports several times. But, signs show that the possibility of a rising correction to correct the fall from Wednesday’s top 89.09 to Friday’s low 86.25 is growing. On the top of these signs: the inverted hammer formation, which appeared on the daily chart, and the completed

Precisely as we have expected, the long awaited reversal has finally started. It came in a time after the Euro penetrated 1.30 and everybody was cheering for it! However, it broke the support specified in yesterday’s report at 1.2869, and successfully reached the suggested target 1.2764. The evidences we provided in yesterday’s report has triumphed for the technical analysis, over other things which favored the Euro! We have mentioned evidence of a reversal yesterday, especially: 1. No daily close above 1.2997 & 2.

No change for yesterday’s outlook, after the Yen’s strength penetrated the lows of last December & January, we were left with no notable support protecting the 15-year low which was reached last November at 84.81! We will not be a bit surprised if this pair started to move in that direction, and tried to break that low! On the contrary, we have been expecting this for weeks now, and it was included in our reports several times. But, signs show that the possibility of a rising correction to correct the fall from Wednesday’s top 89.09 to Friday’s low 86.25 is growing.

The Euro fluctuated violently on Friday, breaking both the support & resistance specified in the report, but only reaching the target in the case of the support. After breaking 1.2860, the Euro reached the first suggested target 1.2807 successfully. When looking at the hourly chart, we find that Friday's dive has stopped at the bottom of a new rising channel which will be placed under our focus for today. The bottom of the channel is at 1.2807, but after the strong bounce we seen late Friday, the price built another support ahead of the channel bottom at 1.2883. In case we break today's support (1.2883) we will drop to test the bottom of the channel at 1.2807 as a first target.

As we have said several times in last week's reports, signs show that the possibility of a rising correction to correct the fall from June 3rd top 89.09 to July 16th low 86.25 is growing. On the top of these signs: the inverted hammer formation, which appeared on the daily chart, and the completed 5-wave move, and further more what looks to be the corrective waves (a) & (b) forming in an ideal manner (please refer to the attached chart), and wave (c) developing in an ideal fashion. Therefore, and even though we are negative about this pair on the medium term, we should not neglect these signs which force themselves upon us for today! Short term support is at 87.33, and if broken, the price will resume its drop after a 3-wave correction, targeting 86.72 & 85.84.

The Euro survived just above the support we presented in yesterday’s report 1.2883 with amazing accuracy (yesterday’s low was 1.2886). Then it went all the way up to break yesterday’s resistance 1.2942, and it is still approaching the suggested target 1.3026 as we speak (the high until the moment of preparing this report is 1.3016). Therefore, we await a test of the important resistance 1.3026, where there is the 2-month high. But, we will not lose interest in our newly found rising channel we talked about yesterday, and when we look at the hourly chart, we find that Friday’s dive has stopped at the bottom of a new rising channel which will be placed under our focus for today, knowing that the bottom of the channel is at 1.2872.

As we have said several times in last week’s reports, signs show that the possibility of a rising correction to correct the fall from June 3rd top 89.09 to July 16th low 86.25 is growing. On the top of these signs: the inverted hammer formation, which appeared on the daily chart, and the completed 5-wave move, and further more what looks to be the corrective waves (a) & (b) forming in an ideal manner (please refer to the attached chart), and wave (c) developing in an ideal fashion. Therefore, and even though we are negative about this pair on the medium term, we should not neglect these signs which force themselves upon us for today! Short term support is at 86.81, and if broken, the price will resume its drop after a 3-wave correction, targeting 85.84 & 84.81.

The Euro didn’t even come close to the support specified in yesterday’s report 1.2872, finding a bottom at 1.2950, and refusing to drift away from the 1.30 level for more than half a cent, before trying to break 1.3026, without being able to hold above it. Therefore, once again, we await a test of the important resistance 1.3026, where there is the 2-month high. But, we will not lose interest in our newly found rising channel we talked about yesterday, and when we look at the hourly chart, we find that Friday’s dive has stopped at the bottom of a new rising channel which will be placed under our focus for today, knowing that the bottom of the channel is at 1.2903. Moreover, we find the area between Fibonacci 61.8% at 1.3075 and May 10th top 1.3092 to be very interesting.

The Dollar penetrated the resistance specified in yesterday’s report 87.37, and came extremely close to the suggested target 88.01 (yesterday’s high was 87.96). As we have said several times in last week’s reports, signs show that the possibility of a rising correction to correct the fall from June 3rd top 89.09 to July 16th low 86.25 is growing. On the top of these signs: the inverted hammer formation, which appeared on the daily chart, and the completed 5-wave move, and further more what looks to be the corrective waves (a) & (b) forming in an ideal manner (please refer to the attached chart), and wave (c) developing in an ideal fashion, and approaching one of its ideal targets (short term 61.8% Fibonacci level at 88.01).

For the second day in a raw, the Euro didn’t even come close to the support specified in yesterday’s report 1.2903, finding a bottom at 1.2967, and refusing to drift away from the 1.30 level for more than a third of a cent, before trying to break 1.3026, only to stop 2 pips above it. Therefore, we await a test of the set of important resistance levels in the neighborhood 1.3026, 1.3044, and 1.3035, the last of which is our favorite, since it is presented by the trend line drawn from Tuesday’s high on hourly chart.

The Dollar/Yen reached the first of the “ideal” targets for this rising correction: short term 61.8% Fibonacci level at 88.01, and then retreated sharply, dropping for more than 100 pips, which could be read as an “exhaustion” in upside activity. Therefore, and even though we are negative about this pair on the medium term, we should not neglect these signs which force themselves upon us for today! Short term support is at the seriously important 86.81, and if broken, the price will resume its drop after a 3-wave correction, targeting 85.84 & 84.81. Resistance is at 88.01. A break here indicates that the odds of a continuation of the correction of the 5 waves down from 92.87 are still massive.

The Euro broke support specified in yesterday’s report 1.3028, and came close to hitting the suggested target of 1.2962, but it stopped a few steps before it, then it bounced clearly. It is clear that the Euro is facing some difficulties ahead of and around 1.31: there is the well known resistance 1.3092, Friday’s top 1.3105, and now we can also see that after the open, the price has bumped into 1.3086 a couple of times during the Asian session. If the price can go back to trade above 1.3086, reaching 1.32 (and above) will be only a matter of time! The targets in this case will be 1.3200 & the bottom we still remember 1.3266.

Finally, we have clearly surpassed wave 5 bottom, which indicates that the correction we have been monitoring for the past days is finally over, which makes it official: we are in a new down wave! But the bounce from Friday’s low

The Euro broke resistance specified in yesterday's report 1.3174, and came very close to hitting the suggested target of 1.3200, but it stopped (for the second day in a row) only 6 pips before it, before retreating significantly to 1.3181. 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. Therefore, we should keep eyes & mind open today, and consider all scenarios, and keep separate trading plans ready. What is requested from the Euro now is to break the resistance 1.3227 which it is trading almost 20 pips below. This resistance is the key to more fireworks, and is the key to 1.33.

The Dollar/Yen dropped in the down wave we have talked about, it broke the support specified in yesterday's report 86.25, and successfully reached the first suggested target 85.52. With this, the first target of the falling wave is met, but what are the next targets? In the attached chart, which is a weekly one, we can see the falling channel from Sep 07 top. Although the bottom of this channel is very far away, and is just above 74, but there is an interesting trend line inside it, combining the monthly lows of Dec 08, Jan & Nov 09. This line is around 82.65 currently, providing us with a perfect target for this dropping wave, since we still expect, as we did before, that it will dive below 84.81.

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.

The Dollar/Yen did not break the support specified in yesterday’s report, not even with a single pip. It consolidated above it, and edged higher until it reached 86.43. We can classify that as a clear attempt to rebound, coming after the current falling wave (which we talked about several times) has reached its first suggested target at 85.52. Nevertheless, we see these attempts as weak and shallow. We believe the falling wave will continue to seek lower targets, after a limited correction, but what are the next targets? In the attached chart, which is a weekly one, we can see the falling channel from Sep 07 top.

The Euro broke the resistance specified in Friday’s report 1.3212, and successfully reached the first suggested target 1.3311, reaching the highest level in more the 3 month in the Dollar-aftermath which followed the coming out of the US monthly employment report. Technically, what is really important is that we came close on Friday to a very important trend line, and we are still around it: the trend line rising from June 29th low on hourly the chart, which is running at 1.3194. 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 to start the week with.

The Dollar/Yen broke the support specified in Friday’s report 85.74, and dropped to a new yearly low at 85, only 19 pips above the 15 year low we have seen in November 09! With this, the falling wave has successfully managed to reach yet another target, but what are the next targets? In the attached chart, which is a weekly one, we can see the falling channel from Sep 07 top. Although the bottom of this channel is very far away, and is just above 74, but there is an interesting trend line inside it, combining the monthly lows of Dec 08, Jan & Nov 09. This line is around 82.65 currently, providing us with a perfect target for this dropping wave, since we still expect, as we did before, that it will dive below 84.81.

The Euro broke the support specified in yesterday’s report 1.3133, and dropped as expected, only to stop at 1.3070, without reaching the suggested target. Then (which is a lot more important), the price jumped in the post-Fed chaos to 1.3226 (7 pips below our resistance), testing the previously broken trend line, accurately (please refer to the attached chart). If it a well known technical principle that such an accurate retest confirms the break it followed, and the new direction, which is down in this case. Looking at the attached chart, we can see that: 1. the rising trend line was broken decisively and 2. the price retested this line in an accurate fashion. These are obvious indication of a falling trend.

The Dollar/Yen broke the support specified in yesterday’s report at 85.78, and dropped to 85.16, approaching this year’s low of 85.00 which we have seen on Friday. However, the price consolidated above 85, and corrected the drop up to 85.45. With this, we see a continuation of the correction from Friday’s low, after hitting another, lower target for the downward wave we have been talking about for weeks, , but what are the next targets? In the attached chart, which is a weekly one, we can see the falling channel from Sep 07 top. Although the bottom of this channel is very far away, and is just above 74, but there is an interesting trend line inside it, combining the monthly lows of Dec 08, Jan & Nov 09.

The Euro broke the support specified in yesterday’s report 1.3032, and dropped as expected, reaching both suggested targets 1.2961 & 1.2875 with complete success, to move 400 pips away from last Friday’s “Jobs-report-top”. We have commented on the retest case which took place after the Fed’s statement Tuesday evening by saying: “it is a well known technical principle that such an accurate retest confirms the break it followed, and the new direction, which is down in this case. Looking at the attached chart, we can see that: 1. the rising trend line was broken decisively and 2. the price retested this line in an accurate fashion. These are obvious indication of a falling trend.

The Dollar/Yen broke the support specified in yesterday’s report at 85.16, and dropped to 84.70 which is a 15-year low not seen since June 1995! Later, it consolidated above 85, and corrected the drop up to short term Fibonacci

The Euro broke the support specified in yesterday’s report 1.2869, and dropped as expected, “almost” reaching the first suggested target 1.2775, as it stopped just 5 pips before it, to move 550 pips away from last Friday’s “Jobs-report-top”. We have commented on the retest case which took place after the Fed’s statement Tuesday evening by saying: “it is a well known technical principle that such an accurate retest confirms the break it followed, and the new direction, which is down in this case. Looking at the attached chart, we can see that: 1. the rising trend line was broken decisively and 2. the price retested this line in an accurate fashion. These are obvious indication of a falling trend.

The Dollar/Yen broke both the support and resistance specified in yesterday’s report without being able to create massive moves in both cases. Therefore, and although we believe the possibilities of a rising correction are higher now, we do not see a lot of changes to the technical outlook. The Dollar/Yen had previously reached our main target of this falling wave, which we talked about for the last 2 weeks: a drop below 84.81 & a new 15-year low, but what are the next targets? In the attached chart, which is a weekly one, we can see the falling channel from Sep 07 top. Although the bottom of this channel is very far away, and is just above 74, but there is an interesting trend line inside it, combining the monthly lows of Dec 08, Jan & Nov 09.

As the new week started, The Euro consolidated just below Friday’s low, reaching 1.2733 before rebounding fast to 1.2869. Such a rebound is considered very “modest” comparing to the drop it followed, which came very close to 600 pips! We can clearly see that we have not even reached the first Fibonacci level 38.2%. Technically, the most important event was dropping to another important trend line, which is the rising trend line from June 7th low (please refer to the attached chart). This line which was tested accurately yesterday, is at 1.2759. But before we think about it, there is another support worth mentioning which is 1.2822.

Let’s leave the daily & weekly charts we have been obsessed with lately, and just focus on the hourly chart. We can see that there is a very exciting trend line, dropping from June 4th top. This line is almost at 86.21: the resistance which the price tried to break on Friday, but left it alone shortly after that. Therefore, all of our attention is at the exciting trend lien & the importance it provides. As long as we are trading below this line, the downtrend will be ok, but if we break the resistance 86.21 we will shoot up targeting 87.00 and may be 87.70. Where if we go back to trade below the support 85.00, there will be nothing stopping the price from reaching our awaited target 83.85, and may be at a later time we will see 82.65 as well.

Support:

The Euro went on with its bounce from the bottom it reached shortly after the weekly open 1.2733, and scored a high at 1.2914, before dropping to the support we specified in yesterday's report 1.2822 down to the pip. Such a rebound is considered very "modest" comparing to the drop it followed, which came very close to 600 pips! We can clearly see that we have not even reached the first Fibonacci level 38.2%. Technically, the most important event was dropping to another important trend line, which is the rising trend line from June 7th low (please refer to the attached chart). This line which was tested accurately on Monday, is at 1.2802.

The Euro's bounce from the bottom it reached shortly after the weekly open at 1.2733, halted yesterday at 1.2920. Such a rebound is considered very "modest" comparing to the drop it followed, which came very close to 600 pips! We can clearly see that we have not even reached the first Fibonacci level 38.2%. Technically, the most important event was dropping, and now reaching, another important trend line, which is the rising trend line from June 7th low (please refer to the attached chart). This line which was tested accurately on Monday, is running now at 1.2793, and it was touched and slightly surpassed during the Asian session, with the price bottoming at 1.2781.

Boredom is back! Boredom is here again! As we have seen in previous periods this year, the Dollar/Yen is back to trading in very tight ranges, it did not break any of the levels specified in yesterday's report. It approached 85 but failed to make a break, it also stayed the whole time below the resistance 86.21. Let's leave the daily & weekly charts we have been obsessed with lately, and just focus on the hourly chart. We can see that there is a very exciting trend line, dropping from June 4th top. This line is running currently at 86.06. Therefore, all of our attention is at the exciting trend line & the importance it provides.

The Euro’s traded relatively sideway, which was deeply frustrating. It tried to break the trend line we have been watching for the whole week, but it was bouncing back above 1.28 every time. Moreover, it broke our resistance 1.2867, without being able to reach the upside target. Yesterday’s trading was very frustrated to us, because we were waiting eagerly for a massive move after the price has finally touched the rising trend line from Jul 6th bottom.

We were expecting a major one-way move after this “meeting” between the price and the all important trend line, whether broken or not, we were expecting a serious movement away from this line, which unfortunately did not happen yesterday!

The Dollar/Yen broke the support specified in yesterday’s report 85.35, and dropped as expected to stop a few steps before our suggested target. Let’s leave the daily & weekly charts we have been obsessed with lately, and just focus on the hourly chart. We can see that there is a very exciting trend line, dropping from June 4th top.

As expected, the Euro landed hard after breaking the support we specified in Friday’s report 1.2791, dropping more than 125 pips, and stopping only 3 pips before meeting our target @ 1.2660. With this new extension to the medium term drop from 1.3332, the size of this drop has become enormous, and cannot be ignored. Last week, we suggested a wave count with 5 complete waves up from 1.1875. But, until this moment, we have not reached but only the first Fibonacci retracement level for the 5-wave move at 1.2775. Therefore, in spite of the size of this drop, we highly doubt that it has shown all its cards. We believe this drop is capable of reaching Fibonacci 50% at least, or even go lower than that.

The Dollar/Yen did not break the support or the resistance specified in Friday’s report. It traded in a very dull range of almost 55 pips, and we are still waiting for a break bringing some excitement to this pair. Let’s leave the daily & weekly charts we have been obsessed with lately, and just focus on the hourly chart. We can see that there is a very exciting trend line, dropping from June 4th top. This line is running currently at 85.80. Therefore, all of our attention is at the exciting trend line & the importance it provides. As long as we are trading below this line, the downtrend will be ok, but if we break the resistance 85.80 we will shoot up targeting 87.00 and may be 87.70. The support is provided by an important intraday support at 85.18.

The Euro traded violently yesterday, breaking both the support & resistance we specified in yesterday’s report without reaching any of the targets in both cases. These “nervous” moves are definitely a cause of frustration for us, we hope for an end of such price activity soon, since they mean nothing technically. Looking at the daily chart, we can see signs of a reversal, on top of which is the (Inverted Hammer) pattern, which appears twice. Last week, we suggested a wave count with 5 complete waves up from 1.1875. And as we reach Fibonacci 50% for this massive move at 1.2604, we should not neglect the possibility that the correction might me over after reaching such an important target.

The Dollar jumped more than 120 pips from its 15-year low which it hit on Tuesday at 83.58, reflecting a “fear” of what the BoJ might do! In the attached chart, which is a weekly one, we can see the falling channel from Sep 07 top. Although the bottom of this channel is very far away, and is just above 74, but there is an interesting trend line inside it, combining the monthly lows of Dec 08, Jan & Nov 09. This line is around 82.65 currently, providing us with a perfect target for this dropping wave, which we expected, from the very beginning, that it will dive below 84.81. Let’s leave the daily & weekly charts we have been obsessed with lately, and just focus on the hourly chart. We can see that there is a very exciting trend line, dropping from June 4th top.

At an early hour this morning, the Pound broke the resistance specified in yesterday’s report 1.5522, breaking with it the falling trend line from this year’s high. Earlier, the pair broke the rising beautiful trend line from June 8th bottom, breaking with it the short term rising trend. Today’s jump has brought things back to complete chaos, since it was a “move-up” after breaking a 2.5 month old rising trend line! This may indicate that the Pound is on the way to retest that line at the very important 1.5757. Short term resistance is at 1.5600, if broken, the price will start rising with the objective of testing a very important level: 1.5757. If this resistance is broken, the short term uptrend & medium term uptrend will be revived, with a first target at 1.5860.

The Euro reached a new weekly high on Friday at 1.2777, before retreating around 50 pips by the closing time. With this, the Euro continues to rise slowly, without being able to create a reaction that can be compared to the massive drop from 1.3332. This slow upside activity is actually a sign of weakness, and the rise look pretty corrective. And unless the Euro moves clearly up today, things will become hard for the single currency, and this will leave room for the Dollar to take over. Short term most important support is provided by the rising trend line from last week’s low, which is currently at 1.2675. If broken, the Euro will start to lose ground, and will probably drop hard to 1.2550, and may be at a later time to the all important 1.2432.

The Dollar/Yen has tested (and surpassed) the falling trend line from Jun 4th top, which we talked about in Friday’s report, and said that it is at 85.28. Then it closed very close to it at 85.21. Although it came close to the 86 level after this week’s open, reaching a 9-day high, it came back down in the midst of the disappointment of the BoJ this morning. If we break this line decisively, the downtrend which started on June 4th will be over, and the Dollar will be ready to takeoff. The “verbal intervention” last week may and may not be the reason for this 200+ pips bounce after reaching a 15-year low, but technically breaking this line means a lot regardless of the Japanese authorities’ position.

The Pound dropped modestly on Friday, reaching 1.5441 before consolidating, and closing, above 1.55. Although the bounce we have seen from last week’s low is still small relatively to the drop if followed, and although this bounce did not make it to the first Fibonacci retracement level of 38.2%, we believe that it has a chance as long as it holds above 1.5441. The Pound is required to hold above this level, and then shoot up to test the resistance 1.5587. We do not recommend taking sides before the price leaves this “neutral zone” we see between 1.5441 & 1.5587. Therefore, today will be very significant for determining the next phase’s direction. And we will be before two scenarios: first, a break of 1.5441, in this case the rise from 1.5370 will be purely a correction.

Yesterday’s headline for the EURUSD was “Slowly rising, signaling weakness”, and the Euro listened, and kept on falling from the weekly open, losing more than 130 pips from its Asian session high. And with this drop, the pair broke our support 1.2675 and dropped more than 40 pips below it so far. This break, even though did not have immediate results, will destroy the Euro on the short term, and probably harm it on the medium term as well. The reason we believe so is that, this break in specific is the single most important technical factor in classifying the rise from 1.2586 as purely corrective. Therefore, we expect the pair to lose ground, and start to drop with targets below last Tuesday’s bottom.

Although it came close to the 86 level after this week’s open, reaching a 9-day high, Dollar/Yen came back down in the midst of the disappointment of the BoJ yesterday. The Yen is back in the driver’s seat, and it will drive this pair lower again. The support specified in yesterday’s report at 84.77 was broken, and the price dropped to 84.11 so far. We expect the Yen’s strength to continue, and we believe we will see levels below 83.58 on the short term.

Early this morning, the Pound broke the support specified in yesterday’s report 1.5441, after holding above it all day yesterday. With this break this pair has left the “neutral zone” which we said is between 1.5587 & 1.5441. Therefore, it is only logical now to expect the Pound to dive. But after more than 150 pips down from yesterday’s top, the price is subject to a short term correction, with a condition of staying below 1.5510. The Pound is notorious for breaking, then moving in the other direction, before moving in the right direction smoothly and strongly. Short term support is at 1.5405, which we are trading just above as this report is prepared. If broken, the Pound will continue to fall, passing by 1.53 areas swiftly, and target 1.5293 & 1.5224.

Monday’s headline for the EURUSD was “Slowly rising, signaling weakness”, and the Euro listened, and kept on falling from the weekly open, losing more than 140 pips from yesterday’s Asian session high. And with this drop, the pair broke our support 1.2643 only to disappoint and drop less than 20 pips below it. But the surprise came yesterday just after the NY open, when the Euro bounced and jumped from its 5-day low at 1.2624, to 1.2741. This surprising jump could mean that the single currency has not given up yet, and that it will try to overcome a negative outlook. Short term resistance is at 1.2792, and breaking it will mean that it is able of achieving more games. The targets will be 1.2871 & 1.2959.

Dollar/Yen traded below the 84 level for a short while, then jumped to around 84.60 and consolidated above 84. This is probably just a short break, and once it is over, we expect the Yen’s strength to continue, and we believe we will see levels below 83.58 on the short term. We have noticed an ideal (Dark Cloud Cover) candle pattern on the daily chart (please refer to the attached chart), and this is a well known bearish pattern which promises more excitement as we drop lower & lower, especially after the BoJ disappointing the markets yesterday, and the “Japs” saying that they are “watching the currency movement closely”!

The Pound broke the support specified in yesterday’s report 1.5405, and dropped exactly as expected to reach 1.5326, which was not enough to meet our suggested target which was pips below 1.53. With this break this pair has left the “neutral zone” which we said is between 1.5587 & 1.5441. Therefore, it is only logical now to expect the Pound to dive. But after more than 240 pips down from yesterday’s top, the price is subject to a short term correction, with a condition of staying below 1.5480. The Pound is notorious for breaking, then moving in the other direction, before moving in the right direction smoothly and strongly. Short term support is at 1.5382, which we are trading just above as this report is prepared.

For the first time in 11 days the Euro reached 1.28, penetrating the resistance in yesterday's report 1.2792, declaring that it refuses to give up. However, the rise stopped just before our target 1.2871, and the pair consolidated around 1.28 without getting very far from it, which keeps the hopes of more upside activity alive. Looking at the hourly chart, we see an obvious horizontal support at last week's high 1.2777. The drop in the Asian session stopped only 3 pips above it, to give it more importance. If we hold above this level, the current bounce is expected to add more gains. But if broken, the Euro will gradually give up the latest gains, and will drop to 1.2676 first, and at a later time to 1.2550.

The moment the Pound broke 1.5441 on Monday, this pair has left the "neutral zone" which we said is between 1.5587 & 1.5441. Therefore, it is only logical now to expect the Pound to dive. But after more than 240 pips down from yesterday's top, the short term correction we are seeing now is (As we said yesterday) no surprise, with a condition of staying below 1.5480. The Pound is notorious for breaking, then moving in the other direction, before moving in the right direction smoothly and strongly. And now that we have tested 1.5480, we should wait and see what will the price do with it! Breaking this important level (in case it happens) can change the outlook dramatically! Short term support is at 1.5395, which was tested earlier this morning.

The Euro benefited from the US jobs report to approach 1.29 on Friday, and penetrated it after the market opened again last night. It seems like the Euro is targeting the top of the rising hourly channel which is illustrated on the attached chart. This top is at 1.2920, which is also Aug 18th high. When we take look at the hourly chart, we can spot an interesting support at 1.2777. This support is formed by Aug 27th high, and on Thursday, the price stopped 3 pips below it during the Asian session and 2 pips above it during the European sessions, which adds to its importance. Moreover, the rising trend line from Aug 31st low is now at 1.2837, providing the most important short term support. So, we will be in a neutral zone between 1.2920 & 1.2837, waiting for a break!

The Pound jumped after the market open and went back to test the important resistance area 1.5480/90, which was tested on the first day of this month, and dropped from there with more than 100 pips at that time. This area is formed between the short term Fibonacci 61.8% level at 1.5480, and Sep 1st high. Will the price break it or will it frustrate it again just like it did 5 days ago? We strongly believe that the reaction from this area is the single most important thing that will determine the direction for the next few hours. If we break it (And here we prefer a break of the top of the area at 1.5490, not the Fibo level at 1.5480), the price will jump to 1.5565, and may be later to 1.5669.