After forging a fresh downside breakout overnight, the Euro has recovered slightly on the heels of better than expected economic survey results. The Euro was partly under pressure because of favorable US data earlierthis week and it was also under pressure because of ongoing concerns that a number of European banks mightfail stress tests. However, with the prospect of a jump in US claims later this morning, the Euro is seeing someshort covering action. In the event that US claims actually decline, that could throw the Euro right back into a freshdownside extension. In short, the combination of US initial claims, leading indicators and a Chicago Fed NationalActivity index look to be a major pivot point for the currency markets. To be a buyer of the Euro, is trading againstthe established trend.
Technical Outlook: The daily stochastics gave a bearish indicator with a crossover down. Decliningmomentum studies in the neutral zone will tend to reinforce lower price action. The close below the 18-daymoving average is an indication the intermediate-term trend has turned down. The market setup is somewhatnegative with the close under the 1st swing support. The next downside objective is 125.6675. The next area ofresistance is around 126.9849 and 127.7275, while 1st support hits today at 125.9550 and below there at125.6675.