While the outlook for the Dollar is unimpressive, the outlook for the Euro is even less impressive. With aseries of disappointing economic results overnight from the Euro zone (weak inflation, banking fears, soft Italianand French industrial output) the bear camp has a long list of themes capable of throwing the September Euroback below the 1.36 level ahead. However, the Euro might be temporarily cushioned by this morning’s USscheduled data flows, but we can’t rule out at least a temporary slide below the 1.36 level in the days ahead.
Technical Outlook: The major trend could be turning up with the close back above the 40-day movingaverage. Momentum studies trending lower at mid-range should accelerate a move lower if support levels aretaken out. The cross over and close above the 18-day moving average is an indication the intermediate-termtrend has turned positive. The market’s close above the 2nd swing resistance number is a bullish indication. Thenext downside target is now at 135.9050. The next area of resistance is around 136.6700 and 136.8250, while 1stsupport hits today at 136.2100 and below there at 135.9050.