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. For the short term, the wave count illustrated on the chart, shows a 4-wave drop, in which yesterday’s “break” is wave 4, and we still have room for another leg down below 1.1875, in what would be wave 5. Short term support is at 1.1932, and if broken the Euro will continue its drop to 1.1825, and then 1.1754. The resistance is at 1.1984, and breaking it will give the chance for the Euro to catch a break, and rise to the important 1.2085 & 1.2155.

Support:

• 1.1932: the rising trend line from yesterday’s low on intraday charts.

• 1.1825: Feb 27th 2006 low.

• 1.1754: Dec 6th 2005 low/

Resistance:

• 1.1984: important intraday level.

• 1.2085: Fibonacci 61.8% for the last drop from 1.2214.

• 1.2155: the top of the falling channel on the 4-hour chart.