[Paul Koszarny]

Stock market sentiment improved widely with major indices a few percent up this session and on the shoulders of it EUR/USD collapsed from early Asian top at 1.0955. The initial drop to first daily support 1.0812 slowed down a bit, though any attempt to go long from there during a five-hour consolidation fell short of buyers' expectation and further declines were seen, this time to almost 1.0750. The last rise towards 1.0950 is a clear example of
mastery of the operators and the so called free market. Behind were visible big names who trampled quite a number of less flexible investors. Just to give an example from my local courtyard, EUR/PLN was lifted to a magnificent 4.4838 through an effort of some German banks to earthquake Polish exporters who had hedged at levels much lower than that. Stops were triggered and few positions opened anew because 17:00CET of the high was already after local closing hours. Today EUR/PLN dropped 1800 pips. EUR/USD wrongfooted traders had to evacuate rapidly and this Wednesday will undoubtedly be remembered for severe wounds. The hourly picture remains weak for the euro. The down trend is already over 21 hours long leaving us with terribly oversold indicators. The top of the week came one day before the forecast. It appears that under these conditions EUR/USD could bottom out only at 1.0650 for some decent retracement though we are entering this week's fractal area where there may be some reaction. The nearest strong support lies at 1.0726.