The Euro has found some support overnight in the wake of the disappointing economic report flow fromthe US on Monday. It is also possible that the Euro is deriving some speculative buying from traders hopeful ofthawing of tensions between Russia and Ukraine in the wake of the official meeting today. However, we think itfolly to assume that Putin is poised to relent especially in the face of recent incursion reports and knowing thatUkraine owes Russia billions for unpaid natural gas bills. However, the Euro might find it difficult to recover in theface of ongoing calls for stimulus and because of the political power struggle in France. Another thing that mightundermine the Euro early today is expectations of a 5.5% rise in US Durable goods as that could catch the Euroshort term technically vulnerable, as the Euro as of this writing sits roughly 30 points above the overnight lows.Maybe the Euro is poised to bottom but the longs are taking significant risk in predicting a turn in a well-definedfundamental and technical down trend pattern.
Technical Outlook: Daily stochastics are trending lower but have declined into oversold territory. The closebelow the 9-day moving average is a negative short-term indicator for trend. The gap down on the day sessionchart is bearish with more selling pressure possible today. The market’s close below the 1st swing supportnumber suggests a moderately negative setup for today. The next downside objective is now at 131.7025. The 9-day RSI under 30 indicates the market is approaching oversold levels. The next area of resistance is around132.0950 and 132.2425, while 1st support hits today at 131.8250 and below there at 131.7025.