The Euro has managed a consolidation and a modest bounce off its recent lows and the brunt of thataction has been the result of hope for a sustained cease-fire in the Ukraine and some of the bounce might bespeculation that US numbers directly ahead might not live up to the high expectations set by the Dollar into thisweek’s highs. In short, the biggest bull argument for the Euro is its oversold technical status and to completelythrow off the down trend pattern in the Euro probably requires the prospect of the removing the Ukraine situationfrom the back of the European economy. We suspect a bounce but we don’t see enough fundamental change tocall for a sustained low.
Technical Outlook: The daily stochastics have crossed over up which is a bullish indication. Dailymomentum studies are on the rise from low levels and should accelerate a move higher on a push through the 1stswing resistance. The market’s short-term trend is negative as the close remains below the 9-day movingaverage. The upside daily closing price reversal gives the market a bullish tilt. Market positioning is positive withthe close over the 1st swing resistance. The near-term upside objective is at 130.2675. With a reading under 30,the 9-day RSI is approaching oversold levels. The next area of resistance is around 129.9549 and 130.2675,while 1st support hits today at 128.9650 and below there at 128.2875.