The Euro broke the resistance specified in yesterday's report 1.3441 and reached the first suggested target 1.3551 successfully, stopping only 8 pips above it. . The collapse which happened late last week is completely expected, not only that, but we believe what we have seen yet is just part one of a strong and massive medium term drop which has already started! We will not be a bit surprised when we see the Euro below 1.30 in the near future, on the contrary, we look forward with eager to that. But after dropping from 1.38 to 1.32 in a few days, a rising correction is normal & logical thing and holds no surprises.

Thus, we should focus of the projected targets for this correction, the most important of which is the Fibonacci 61.8% resistance at 1.3606. Adding importance to this level is the fact that the long term descending trend line has finally touched the Fibonacci level. The possibility of forming a medium term top between the current price & 1.3606 is getting larger by the minute. Thus we do not recommend taking a positive attitude towards the EURUSD ahead of 1.3606, and we also recommend to be on the watch for any indications that a medium term top is forming in the neighborhood. Short term resistance is 1.3606, breaking it would indicate a jump to 1.3703 and then 1.3794. Short term support is at 1.3494, breaking it would frustrate the Euro and send it to 1.3394 & may be 1.3283.

Support:
* 1.3494: Asian session low.
* 1.3394: the bottom of the rising channel on 1.3266 on hourly charts.
* 1.3283: Thursday's low.

Resistance:
* 1.3606: Fibonacci 61.8% for the drop from 1.3816.
* 1.3703: Mar 8th high.
* 1.3794: Mar 12th high.