Draghi comments hinting at more efforts to battle the threat of deflation take on added significance aheadof the weekend especially with the Euro yesterday spiking up to 1.3967. In fact, the ECB has indicated it is”preparing” additional policy steps to deflect the threat of slowing that is likely to come as a result of the sharpupside extension in the Euro over the last two months. Underpinning the Euro this morning is German FebruaryCPI data that managed a rise of +0.5% and up +1.2% on the year. Up trend channel support in the March Euro isseen today down at 1.3770 and that support rises to 1.3781 on Monday. Most traders doubt the ECB will takeaction quickly to deflate the value of the Euro.
Technical Outlook: The market rallied to a new contract high. Momentum studies are trending higher buthave entered overbought levels. The close above the 9-day moving average is a positive short-term indicator fortrend. The downside closing price reversal on the daily chart is somewhat negative. The swing indicator gave amoderately negative reading with the close below the 1st support number. The next upside target is 140.0800.The next area of resistance is around 139.2700 and 140.0800, while 1st support hits today at 138.0500 and belowthere at 137.6400.