In addition to economic optimism toward the Dollar, the Euro is seeing added pressure from expectationsof ECB easing. Other issues pressuring the Euro this morning are slack French and German private sectoractivity and fears that the ECB will draw out its stimulus efforts over a period of months, instead of actingaggressively today. With the German readings overnight posting the slowest activity in 8 months for June, theprimary engine of Euro zone growth is called into question. The path of least resistance is pointing downward andthe rate of decline in the Euro could accelerate in the event that US non-farm payrolls gain more than +220,000.Initial downside targeting in the September Euro is seen at 1.3631.
Technical Outlook: Studies are showing positive momentum but are now in overbought territory, so somecaution is warranted. The close above the 9-day moving average is a positive short-term indicator for trend. Theclose below the 2nd swing support number puts the market on the defensive. The next upside target is 137.0700.The next area of resistance is around 136.8300 and 137.0700, while 1st support hits today at 136.3900 and belowthere at 136.1900.