Talk that the ECB hasn’t fully decided to ease in June has provided some support for the Euro over thelast 24 hours. However, somewhat slack Euro zone May PMI data has robbed the Euro of buying interest and thatcould mute the benefits of a rise in US claims later this morning. However, as usual German data served tocountervail some of the disappointment from the broader Euro zone data flows and therefore the bears don’tseem to be poised to press their case further today. While the charts favor the bear camp, the Euro has comedown so much from the early May highs, that it could take some signs of positive economic activity in the US toextend the downside effort in the Euro. Initial support might hold at 1.3651 but the claims window is potentially thetrend setting development of the session.
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 daily closing price reversal down is a negative indicator for prices. The market setup is somewhatnegative with the close under the 1st swing support. The next downside objective is now at 135.9000. The 9-dayRSI under 30 indicates the market is approaching oversold levels. The next area of resistance is around 137.2800and 137.7000, while 1st support hits today at 136.3800 and below there at 135.9000.