In a word, the outlook for the European economy has taken another hit in the wake of the German ZEW slide. Italian style deflation fears are given more traction in the wake of the German economic news overnight andthe overall economic outlook is also made worse by ongoing prospects of even more Russian sanctions drag ahead. In fact, a disruption of Russian gas flow through the Ukraine to Europe in the face of colder weather thisfall might be another stumbling block for European economies. The path of least resistance and trend remainsdown in the Euro. Near term targeting is 1.3335 but there is really no reason for the Euro to respect that supportlevel. The next lower technical point for the September Euro is the November 2013 spike low of 1.3318.
Technical Outlook: Daily momentum studies are on the rise from low levels and should accelerate a movehigher on a push through the 1st swing resistance. The market’s close below the 9-day moving average is anindication the short-term trend remains negative. It is a slightly negative indicator that the close was under theswing pivot. The next upside target is 134.1900. The next area of resistance is around 134.0000 and 134.1900,while 1st support hits today at 133.7200 and below there at 133.6300.