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! As for the short term the support is at 1.2244, and breaking it will drag the Euro to the important 1.2142 then to a new cycle low at 1.2068. The resistance is at 1.2312, and breaking it indicates a continuation of the rising correction which will target 1.2411 first, then its ideal target at
1.2472. It goes without saying that this 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:

• 1.2244: Asian session low.

• 1.2142: This cycle’s and 4-year low.

• 1.2068: Apr 13th 2006 low, the last important support before the 1.2000 level.

Resistance:

• 1.2312: the top of the rising channel on the hourly & 4-hour charts.

• 1.2411: Fibonacci 50% for the drop from 1.2670.

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