A big range down extension overnight in the Euro sends the currency down to the lowest level since last September. At present we find it difficult to turn off the downward washout as ECB and EU officials welcome theslide in the currency and data flow expectations continue to expect near deflation results. With a negative GermanPPI reading for July release overnight, the bearish tide is fueled and that bias might see an additional boost laterin the wake of the US Fed meeting minutes release. Next support in the September Euro is seen down at 1.3265.
Technical Outlook: The daily stochastics have crossed over down which is a bearish indication. Momentumstudies are still bearish but are now at oversold levels and will tend to support reversal action if it occurs. Themarket’s short-term trend is negative as the close remains below the 9-day moving average. The defensive setup,with the close under the 2nd swing support, could cause some early weakness. The next downside target is132.7925. The next area of resistance is around 133.4650 and 133.8125, while 1st support hits today at 132.9550and below there at 132.7925.