A definitive downside breakout in the Euro overnight suggests that soft inflation, disappointing Euro dataand dovish talk from the ECB has worked its magic on the Euro currency. News that Euro zone private sectorlending declined has probably added into the downward track on the Euro charts this morning. With EU officialsworking to talk down the Euro, the fresh downside breakout isn’t surprising. What is a little surprising is that theEuro has displayed such weakness, without noted fundamental strength in the Dollar. However, some traders fearan expansion of region political turmoil despite the build up of aid for the Ukraine. There might be little in the wayof support seen in the June Euro until even numbers of 1.37.
Technical Outlook: Stochastics trending lower at midrange will tend to reinforce a move lower especially ifsupport levels are taken out. A negative signal for trend short-term was given on a close under the 9-bar movingaverage. The market tilt is slightly negative with the close under the pivot. The next downside target is 137.3850.The next area of resistance is around 138.0700 and 138.4250, while 1st support hits today at 137.5500 and belowthere at 137.3850.