While the 2nd round of sanctions haven’t been fully employed and there is talk of additional sanctions being levied against Russia, fears of added slowing in the Euro zone because of the sanctions is contributing tothe ongoing weakness in the Euro zone. While the Euro might be cushioned by a lack of a definitive rate hikewindow from the BOE overnight, the ECB probably wants to facilitate the slide in the Euro in an effort to stimulateinternational trade and in turn cushion the Euro zone against the drag of Russian sanctions. Other issuesweighing on the Euro are ongoing weakness in Portuguese bonds and news of a rise in Euro zone debt levels.Near term downside targeting in the September Euro is seen at the next even number of 1.340.
Technical Outlook: Momentum studies are still bearish but are now at oversold levels and will tend tosupport reversal action if it occurs. The close below the 9-day moving average is a negative short-term indicatorfor trend. The close below the 2nd swing support number puts the market on the defensive. The next downsidetarget is now at 134.1225. With a reading under 30, the 9-day RSI is approaching oversold levels. The next areaof resistance is around 135.0549 and 135.5425, while 1st support hits today at 134.3450 and below there at134.1225.