In a telling reaction, the Euro has remained under pressure overnight despite generally favorable Eurozone retail sales and PMI results. Perhaps the trade was left off balance because of softer than expected Eurozone price readings. However, with the Euro zone year on year rise in retail sales, the largest since 2007, onemight have expected the decline in the Euro to have been arrested this morning. Therefore we assume that thetrend in the Euro remains down and that positive Factory orders results from the US later today will probablyresult in the September Euro re-testing last week’s lows. Ultimately we expect to see the September Euro falldown to the lowest levels since last November.
Technical Outlook: Daily stochastics are showing positive momentum from oversold levels, which shouldreinforce a move higher if near term resistance is taken out. The market’s short-term trend is negative as theclose remains below the 9-day moving average. It is a mildly bullish indicator that the market closed over the pivotswing number. The near-term upside target is at 134.4550. The next area of resistance is around 134.3600 and134.4550, while 1st support hits today at 134.1400 and below there at 134.0150.