More slack inflation news from the Euro zone, signs that Russia is playing the energy card against the Ukraine and widespread ideas that the ECB doesn’t have the ability to head off a deflationary spiral leaves theEuro extremely vulnerable. However, the Euro bulls have some temporary hope of a bounce this morning throughthe US data window as several US economic readings are projected to show weakness. However, the Euro hasso many problems that US data only looks to provide fleeting relief unless US Fed dialogue today clearly shiftsthe pendulum away from future US rate hikes.
Technical Outlook: Momentum studies are rising from mid-range, which could accelerate a move higher ifresistance levels are penetrated. The cross over and close above the 18-day moving average is an indication theintermediate-term trend has turned positive. The outside day up is somewhat positive. There could be moreupside follow through since the market closed above the 2nd swing resistance. The next upside objective is130.5625. The next area of resistance is around 129.5650 and 130.5625, while 1st support hits today at 126.9350and below there at 125.3025.