In agreement with the negative technical outlook we talked about in yesterday's report, the Euro stopped at the first resistance in the report 1.4927 with great accuracy (yesterday's high 1.4926), then dropped breaking the support 1.4861, and reached the first target of that break 1.4771 with great accuracy as well (yesterday's low 1.4769). We still favor more downside movement, which is an expectation built on the negative technical outlook after breaking 1.4992, but we should not neglect the rising probability of an upward correction for the drop from 1.5061, which reached almost 300 pips so far.

Short-term support is provided by the rising trendline from yesterday's low, currently at 1.4801, and breaking it would mean a continuation of the sharp drop, in order to break 1.4771, and target Fibonacci 61.8% for the whole up move from 1.4480, at 1.4702. Short-term resistance is 1.4844, and breaking it would target the area between 1.4881 & 1.4949. If the negative outlook is to persist, the later (1.4949) should hold.

Support:

• 1.4801: the rising trendline from yesterday's low on the intraday charts.

• 1.4760: Oct 13th low.

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

Resistance:

• 1.4844: Monday's low.

• 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.

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