Precisely as we have expected, the long awaited reversal has finally started. It came in a time after the Euro penetrated 1.30 and everybody was cheering for it! However, it broke the support specified in yesterday’s report at 1.2869, and successfully reached the suggested target 1.2764. The evidences we provided in yesterday’s report has triumphed for the technical analysis, over other things which favored the Euro! We have mentioned evidence of a reversal yesterday, especially: 1. No daily close above 1.2997 & 2.

A “reversal day” pattern for yesterdays bar/candle on the daily chart. This shows just how important the area around 1.30 is, which is probably the level most qualified to turn the Euro around, and resize this soaring move into a correction! This strong & sharp jump is a natural fruit of breaking the top of the channel after touching it for a record number of times, but eventually the Euro managed to break it! After that serious barrier, the energized Euro had faced even a harder one: Fibonacci 61.8% for the giant move down from 1.3690 to 1.1875.

This level is at 1.2997, and will act as a heavy weight barrier in the face of this rise, which in spite of the fact that it has achieved more than 1000 pips so far, it still looks corrective (simply because it did not break the divine ratio 61.8% by closing above it). Short term analysis shows a support at 1.2747, and breaking it would officially declare that we are in a downward correction for the whole move from 1.2150 to 1.3026. The ideal targets for this correction are at: 1.2588 & 1.2485. As for the resistance, it is at 1.2793. A break here would indicate initiation of a correction for the whole move down from 1.3026, with the ideal target for this correction at 1.2913. If this one is broken, we will test
1.3026 itself once more!  

Support:

• 1.2747: the rising trend lien from yesterday’s low on intraday charts.

• 1.2588: Fibonacci 50% for the rising move from 1.2150.

• 1.2485: Fibonacci 61.8% for the rising move from 1.2150.

Resistance:

• 1.2793: the falling trend line from 1.3026 on hourly chart.

• 1.2913: Fibonacci 61.8% for the drop from 1.3026 to yesterday’s low.

• 1.3026: Tuesday’s & 2-month high