The Euro is catching a temporary break because of profit taking in the Dollar. In fact, given the slack Eurozone manufacturing results overnight, the trade could have kept up the pressure on the Euro today. However,some traders think that the brunt of the slowing from the additional Russian sanctions has been factored and thatfurther stimulus efforts from the ECB and or a moderating of tensions in the Ukraine has provided some underpinfor the currency. It also seems as if sellers were unwilling to press the short side of the Euro after it declinedbelow 1.29 as volume and open interest fell off significantly. However, to throw off the entrenched downtrend inthe Euro probably requires a progression toward an official Peace in the Ukraine and or stimulus efforts from theEU that effectively improve economic sentiment. For the near term, we can’t rule out a bounce back to 1.2939 butwe aren’t ready to call for a trend reversal.
Technical Outlook: The market broke to a new contract low. Daily stochastics are trending lower but havedeclined into oversold territory. The close below the 9-day moving average is a negative short-term indicator fortrend. The daily closing price reversal up is a positive indicator that could support higher prices. It is a slightlynegative indicator that the close was lower than the pivot swing number. The next downside target is 128.0225.The next area of resistance is around 128.8250 and 129.0425, while 1st support hits today at 128.3150 and belowthere at 128.0225.