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 resistance is at 87.96, and breaking it would mean that the Dollar is about to capitalize on the break of the above mentioned trend line, which will ideally target short term Fibonacci levels: 88.67 & 89.20. This pair is going as expected, in the expected direction, and in convergence with our negative technical outlook for the medium term. We absolutely expect the fall to continue on the medium term. But after hitting 87, we should not neglect the enormous possibilities of a bounce up: a bounce is highly probable, even if it was a temp, but the trend is down without a shadow of a doubt!

Support:

• 87.57: the rising trend line from Thursday’s low.

• 86.95: Thursday’s low.

• 86.47: previous well known support.

Resistance:

• 87.96: important intraday resistance level just above the (broken) falling trend line from Jun 21st top on the hourly chart.

• 88.67: Fibonacci 38.2% for the drop from 91.45.

• 89.20: Fibonacci 50% for the drop from 91.45.