Ella 
24-hour view: We did not expect the euro to fall to a low of 1.0916 (we had expected a consolidation). While the bounce off the lows has taken some momentum off the downside, EUR could fall to 1.0900 before stabilizing. It is unlikely to hit the next important support at 1.0865 today. Resistance is at 1.0970; if the euro rises above 1.0995, it will indicate that the euro’s decline has stabilized.
Next 1-3 weeks: We turned bearish on EUR in the middle of last week. After the euro rebounded strongly yesterday (market price 1.1010 on August 2), we pointed out that “the probability of the euro falling to 1.0920 this time is very low. However, only a breakthrough of 1.1070 will indicate that the current downward pressure has subsided.” We expected the euro to fall sharply and break through 1.0920 (as low as 1.0916 during the North American session). Gaining momentum suggests EUR could fall further to 1.0865. On the upside, ‘strong resistance’ levels moved down from 1.1070 to 1.1020.
