Not surprisingly the gains in the Dollar have translated into a much weaker Euro. Apparently seeing adecline in the May German Ifo readings overnight and seeing weakness in the French economy overall simplyadded to the technical weight hanging over the Euro, as the Euro has now declined to the lowest level sinceFebruary 13th. Suddenly the macro-economic differential between the US and Euro has shifted distinctly in favorof the dollar and one might also suggest that the interest rate differential should be expected to dramatically shiftin favor of the Dollar over the coming month, especially with talk of June easing from the ECB potentiallyfacilitating a very quick slide down to the 135 level in the June Euro.
Technical Outlook: Daily stochastics are trending lower but have declined into oversold territory. The closebelow the 9-day moving average is a negative short-term indicator for trend. It is a slightly negative indicator thatthe close was under the swing pivot. The next downside target is now at 136.1625. The 9-day RSI under 30indicates the market is approaching oversold levels. The next area of resistance is around 136.7450 and137.0225, while 1st support hits today at 136.3150 and below there at 136.1625.