The Euro is vulnerable technically and fundamentally. Fundamentally economic data readings from theEuro zone this week leave the fear of a return to recession in place as more aggressive sanctions are thought tobe retarding growth. Supporting the Euro is fresh hope of ECB stimulus but the ECB is always late and stubbornin implementing policy moves and they can be expected to wait until the stimulus simply countervails a financialpanic, instead of providing an injection of economic confidence. Reports of a dozen armored vehicles entering theUkraine leaves the potential for more downside in the Euro in place off geopolitical issues and we think thattraders should be looking to sell the Euro on rallies.
Technical Outlook: Rising from oversold levels, daily momentum studies would support higher prices,especially on a close above resistance. The market’s close below the 9-day moving average is an indication theshort-term trend remains negative. The market tilt is slightly negative with the close under the pivot. The nextupside target is 134.3350. The next area of resistance is around 133.9700 and 134.3350, while 1st support hitstoday at 133.3700 and below there at 133.1350.