The Euro has tracked weaker this morning in the wake of potentially supportive Euro zone auto salesfigures and from evidence of a Euro zone Trade surplus. It is also possible that a headline reading from theGerman March ZEW prompted some selling pressure in the Euro this morning. We can’t rule out more gains onthe Euro charts ahead, but the magnitude of the gains in the Euro over the last two months appears to leave theEuro overvalued. However, the ECB is usually slow to act with respect to definitive market operations and it couldtake another new high in the Euro, for the central bank to act. As in the Dollar, it is possible that the Euro willcontinue to benefit from a buy the rumor mentality, into the Wednesday afternoon US Fed decision.
Technical Outlook: Rising stochastics at overbought levels warrant some caution for bulls. The market’sclose above the 9-day moving average suggests the short-term trend remains positive. The close over the pivotswing is a somewhat positive setup. The near-term upside target is at 139.8725. The next area of resistance isaround 139.5850 and 139.8725, while 1st support hits today at 138.8950 and below there at 138.4925.