Ella 
24-hour view: Last Friday we noted that the euro “could break below the key support level at 1.0965.” However, we believe that “the euro may not be able to sustain below this level. The next support level at 1.0920 is unlikely.” Although our view is correct Yes, as the euro fell to a low of 1.0942, but we did not expect the euro to recover much from the lows (to 1.1047 during the North American session). Downward pressure has eased and the euro appears to be entering a consolidation phase. The euro is expected to trade between 1.0980-1.1055 today.
Outlook for the next 1-3 weeks: Last Friday (July 28, market price 1.0985), we emphasized that the euro must break through and maintain below the important support level of 1.0965 before it may fall further. Although it fell below 1.0965, the euro rebounded strongly from 1.0942 and closed up 0.38% at 1.1015. Downside momentum has waned, but only a break above 1.1070 (a ‘strong resistance’ level unchanged since last Friday) would suggest that the euro will not fall further. Looking ahead, the next support level is at 1.0920. Meanwhile, short-term overbought conditions could cause it to consolidate for several days.
