Keep in mind the ECB wants to see the Euro fall enough to rekindle international trade. Also keep in mindthe prospect of knock on slowing from what looks to be a long drawn out political wrangling with Russia thatpromises to keep economic sentiment in Eastern Europe under pressure. The fear that more sanctions againstRussia will add to the headwinds facing the Euro zone economy is made even more important in the wake of callsfrom the German Foreign Minister for even more sanctions. In fact, the Bundesbank overnight has suggested thatthe 2nd quarter saw stagnation in the German economy and that should add to the weight dragging the Euro backtoward the next critical chart support target of 1.34.
Technical Outlook: Momentum studies are still bearish but are now at oversold levels and will tend tosupport reversal action if it occurs. A negative signal for trend short-term was given on a close under the 9-barmoving average. The market could take on a defensive posture with the daily closing price reversal down. Theclose over the pivot swing is a somewhat positive setup. The next downside target is 134.9275. The next area ofresistance is around 135.4450 and 135.6675, while 1st support hits today at 135.0750 and below there at134.9275.