The strong downside momentum that started on Friday prevailed in this session, as well. As a result, the Euro breached several support levels and two prevailing ascending channels.
Given the magnitude of the recent fall, it is likely that the rate fails to overcome the 135.00 area where the weekly S1 is located. However, a subsequent advance might not follow right away, as bears could still provide notable resistance to bulls.
In case this surge is to occur, a possible upside target for the following session should be the 100-hour and the weekly PP near 135.80.
Namely, the rate had fallen down to a monthly support at the 134.28 level. It is highly likely that the support level together with the lower trend line of the junior channel down pattern will force the currency pair to stop the decline.
Due to that reason the situation should be watched closely, as a short lived rebound could occur.
This session might finally mark the expected reversal north due to various reasons. First, technical indicators are starting to recover gradually from their daily lows.
Second, the 133.20 area is reinforced by various support levels both on the hourly and daily time-frames, including the 55– and 100-day SMAs. It is likely that bears are unable to overcome this cluster and thus allow for the dominance of bulls.
An upside target for the following session could be the 135.20/40 territory.
Meanwhile, the pair breached the steep channel down. This suggest that some upward momentum might be due in the nearest time. Given that the pair has not yet been able to gain strength, it is likely that this session does not introduce significant changes to its positioning, especially if the northern side is restricted by the 55-hour SMA and the monthly PP circa 134.00.
Today’s low should be the aforementioned monthly S1.