In the face of economic disappointments today the Euro has a slightly positive sentiment. Yesterday’s Euro routing may have been just a bit overdone. Today both Germany and France’s Trade Balances were disappointments along with Germany’s Industrial Production readings being negative. These disappointments should have put more selling pressure on the Euro but its resiliency shows the potential influence of the US employment numbers. Even though there is no direct effect from the US numbers they will be the catalyst for further movement today. If the numbers are strongly positive than the Euro could add to yesterday’s loses, if strongly negative then the Euro will have a good profit taking rally.
Technical Outlook
EUR (SEP): The close under the 60-day moving average indicates the longer-term trend could be turning down. Daily stochastics declining into oversold territory suggest the selling may be drying up soon. The market’s close below the 9-day moving average is an indication the short-term trend remains negative. The outside day down and close below the previous day’s low is a negative signal. There could be some early pressure today given the market’s negative setup with the close below the 2nd swing support. The next downside target is 130.2900. With a reading under 30, the 9-day RSI is approaching oversold levels. The next area of resistance is around 131.7600 and 132.5700, while 1st support hits today at 130.6200 and below there at 130.2900.