Traders continue to project Euro targeting to the 1.35 level with the negative interest rate condition sittingsquarely on the back of the Euro currency. Given a rather thin US economic report slate today, the pace of thedeclines in the Euro might be limited but ongoing currency spread action is generally expected to leave the Euroin a down mode. Talk that recent EU policy moves test the limits of monetary policy clearly leaves the headlineflow in the bear’s camp. To alter the downward pattern might require two closes back above 1.3550.
Technical Outlook: The daily stochastics gave a bearish indicator with a crossover down. Momentumstudies are still bearish but are now at oversold levels and will tend to support reversal action if it occurs. Anegative signal for trend short-term was given on a close under the 9-bar moving average. The swing indicatorgave a moderately negative reading with the close below the 1st support number. The next downside target isnow at 134.8850. The next area of resistance is around 135.7999 and 136.2450, while 1st support hits today at135.1200 and below there at 134.8850.