Slightly positive German manufacturing orders has helped to cushion the Euro against what appears to bean impending downside breakout on the charts. Traders are concerned that US numbers today will clearly leavethe US trending toward tightening, with the ECB generally thought to be leaning toward easing. It is also possiblethat a series of sharp increases in Russian natural gas prices to Ukraine and therefore to large portions of Europeis set to diffuse deflation pressures in the Euro zone. We aren’t sure that the June Euro can avoid a decline to thelowest level since February 27th in the trade today.
Technical Outlook: Momentum studies are still bearish but are now at oversold levels and will tend tosupport reversal action if it occurs. The close below the 9-day moving average is a negative short-term indicatorfor trend. The market’s close below the 1st swing support number suggests a moderately negative setup fortoday. The next downside objective is now at 136.2250. The next area of resistance is around 137.7300 and138.4650, while 1st support hits today at 136.6100 and below there at 136.2250.