The charts look ugly and the overnight news flow didn’t definitively alter this week’s concern toward theEuro zone, even with the Euro zone managing to post a positive trade surplus for the month of March overnight.Pushed into the market we favor the downside with initial targeting of 1.3669 and perhaps even 1.3645 in theJune Euro. In fact, if US housing data is at or above expectations later this morning that should facilitate addeddownward action. A return to the 1.36 level is probably in the cards over the coming week as the trade is forced toprice in the June ECB easing prospect.
Technical Outlook: Momentum studies are still bearish but are now at oversold levels and will tend tosupport reversal action if it occurs. A negative signal for trend short-term was given on a close under the 9-barmoving average. The downside closing price reversal on the daily chart is somewhat negative. The market tilt isslightly negative with the close under the pivot. The next downside target is now at 136.1200. The market isapproaching oversold levels on an RSI reading under 30. The next area of resistance is around 137.5100 and137.8400, while 1st support hits today at 136.6500 and below there at 136.1200.