With a series of significant losses in the Euro putting the currency down sharply over the last 4 tradingsession’s it is not surprising to see more declines in the face of softer than expected German ZEW confidencereadings overnight. While some might discount the weakness in confidence in Germany because of the situationin the Ukraine, that situation doesn’t show signs of ending anytime soon. In order for the Euro to continue to falltoward consolidation low support of 1.3669 (the early April spike low) probably requires something positive fromUS retail sales later this morning. The path of least resistance is down already and positive retail sales resultsfrom the US could simply facilitate more downside action.
Technical Outlook: Daily stochastics declining into oversold territory suggest the selling may be drying upsoon. The close below the 9-day moving average is a negative short-term indicator for trend. The market’s closebelow the pivot swing number is a mildly negative setup. The next downside target is now at 137.3150. The nextarea of resistance is around 137.6800 and 137.8350, while 1st support hits today at 137.4200 and below there at137.3150.