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. If broken, the price will keep dropping, targeting Fibonacci retracement levels for the whole rise from this cycle's low 1.1875. These levels are at 1.2170 & 1.2100, which became a critical medium term level. Today's resistance is at 1.2348, and in case the price succeeds in breaking above it, it will give itself a chance to test the top of the channel yet again. The top of the channel will be the first target of this break, at 1.2457, and if broken, we will jump to 1.2519.

Support:

* 1.2282: Asian session low.

* 1.2170: Fibonacci 50% for the whole rising move from this cycle's low to yesterday's high

* 1.2100: Fibonacci 61.8% for the whole rising move from this cycle's low to yesterday's high

Resistance:

* 1.2348: important intraday level.

* 1.2457: the top of the rising trend channel of the hourly chart.

* 1.2519: May 6th high.