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. Our most important resistance is Fibonacci 61.8% at 1.2472 and not the channel top! We do not see any reason to change our negative technical outlook for as long as the price is below it. As for the short term the support is at 1.2252, and breaking it will drop the Euro to the same target set for yesterday: 1.2142 first, then 1.2000. The resistance is at 1.2350, and breaking it indicates a continuation of the rising correction with its ideal targets between 1.2411 & 1.2472. It goes without saying that the latter is the single most important resistance for the time being, and the separating point between a continuation of the current downtrend, and a reversal to an uptrend! We still believe that the drop to a new cycle low below 1.2142 is only a matter of time, nothing will change that except for breaking 1.2472.

Support:

• 1.2252: the rising trend line from today’s low on intraday charts.

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

• 1.2000: psychological level.

Resistance:

• 1.2350: Fibonacci 38.2% for the drop from 1.2670.

• 1.2411: Fibonacci 50% for the drop from 1.2670, which is very close to the 4-hour channel top.

• 1.2472: Fibonacci 61.8% for the drop from 1.2670.