Despite a favorable Euro zone sentiment reading overnight, the Euro is under pressure due to thestrength in the Dollar, which in turn is back in favor because of the Fed’s decision to continue its tapering pattern.Some economists might point out disjointed readings within the Euro zone sentiment readings and it is clear thatoverall confidence is improving, but that consumer confidence is still at very weak levels. With fears of tighteningof credit standards in the Euro zone, noted in a survey overnight, that is hardly beneficial to the Euro zoneeconomy, especially after the trade yesterday saw minimal gains in Euro zone money supply “growth” as adeflationary signal. While the March Euro might find some support from the 100 day moving average down at1.3583, we have to think the path of least resistance is down and the rate of decline might accelerate if US datashows anything more than measured growth.
Technical Outlook: The market back below the 40-day moving average suggests the longer-term trendcould be turning down. Daily stochastics have risen into overbought territory which will tend to support reversalaction if it occurs. The market’s short-term trend is positive on the close above the 9-day moving average. It is aslightly negative indicator that the close was lower than the pivot swing number. The near-term upside target is at137.3400. The next area of resistance is around 137.0200 and 137.3400, while 1st support hits today at 136.2000and below there at 135.7000.