The March Euro held support at 1.3625, and it has managed to temporarily bounce off of 50-day movingaverage, which comes in down at 1.3626 today. In-line PMI numbers provided little in the way of fresh supportyesterday and therefore the Euro may need to see improved inflation numbers next week to regain any upsidemomentum. News of ongoing weakness in EU corporate lending figures overnight, probably adds to the negativefundamental track in the Euro as that in turn suggests the ECB has to continue to provide support to thestruggling EU economy. In fact, the declines in corporate lending rates were reportedly at a very brisk pace inNovember and that suggests the ECB should continue to favor easing measures, while the US Fed is thought tobe leaning toward tightening policies. Critical support is seen at a quasi double low and 50 day moving averagelevel of 1.3626, while up trend channel support (off a 6 month old up trend channel line) is seen all the way downat 1.3529. The up trend channel support lines rise to 1.3535 on Monday.
Technical Outlook: A bearish signal was triggered on a crossover down in the daily stochastics. Decliningmomentum studies in the neutral zone will tend to reinforce lower price action. The market back below the 18-daymoving average suggests the intermediate-term trend could be turning down. The gap lower on the day sessionchart is bearish and puts the market on the defensive. There could be some early pressure today given themarket’s negative setup with the close below the 2nd swing support. The next downside target is now at135.7775. The next area of resistance is around 137.1950 and 137.7175, while 1st support hits today at 136.2250and below there at 135.7775.