Exactly as it was expected, the Euro collapsed the minute it broke 1.4992, and stopped only 4 pips before our target 1.4840. It is only normal to see it trying to rise now and trying to get back above 1.49, but breaking the trendline put the Euro in a negative technical situation that it will not escape by going back above 1.49.

We will maintain a negative attitude towards the Euro as long as it is below short-term Fibonacci 61.8% resistance at 1.4978. We expect the rising correction to stop somewhere between 1.4927 & 1.4978, and then to continue the drop towards new targets in the 1.47 area, most attractive of which are Fibonacci 50% & 61.8% support levels at 1.4771 & 1.4702. In this case, 1.4702 will hold a special importance, as the first important support for the medium-term in these areas.

Short-term support is 1.4861 and it is provided by the rising trendline from yesterdays low, on the intraday charts. Breaking this line would mean a continuation of the down move, towards our targets 1.4771 and may be 1.4702. Short-term resistance is 1.4978, a break here would be a surprise of some kind, but if it does happen, we will target a retest of the broken trendline at 1.5019, and then 1.5082.

Support:

• 1.4861: the rising trendline from yesterday's low on the intraday charts.

• 1.4771: Fibonacci 50% for the whole move from 1.4480.

• 1.4702: Fibonacci 61.8% for the whole move from 1.4480.

Resistance:

• 1.4927: Fibonacci 38.2% for yesterday's drop.

• 1.4978: Fibonacci 61.8% for yesterday's drop, and the most important resistance for the time being.

• 1.5019: the retest level of the broken trendline.

Forex trading analysis by www. forexpros. com - Written by Munther T. Marji