Not surprisingly, the Euro is losing ground to start today as the trade was presented with yet anotherdisappointing German economic data point. With the ECB attempting to talk the Euro down, the US expected tosee a modest improvement in retail sales and hawkish Fed testimony hopes in place, the path of least resistancein the Euro is clearly pointing downward. Initial support is seen at 1.3579 but we suspect the market will be able toslide straight through that level and potentially fall down to the lowest level since June 18th!
Technical Outlook: The major trend could be turning up with the close back above the 40-day movingaverage. A negative indicator was given with the downside crossover of the 9 and 18 bar moving average.Stochastics trending lower at midrange will tend to reinforce a move lower especially if support levels are takenout. A positive signal for trend short-term was given on a close over the 9-bar moving average. The close over thepivot swing is a somewhat positive setup. The next downside target is 135.7975. The next area of resistance isaround 136.4449 and 136.6575, while 1st support hits today at 136.0150 and below there at 135.7975.