The recent short covering bounce in the Euro clears the road technically for a fresh downside breakoutahead. As in the Dollar, talk of the possible need for additional sanctions against Russia and talk that thesanctions are slowing European growth leave the Euro locked in a slide lower. Initial but thin support is seen at1.2367 and a slide below that level is expected in the coming trading sessions. Another element adding to thedown ward bias in the Euro is suggestions from an ECB official that state-bond buying was theoretically possible.In short, the trend is down and without a noted string of positive data points from Europe and or a 180 degree shiftin Russian actions toward the Ukraine, traders should view rallies as opportunities to get short the Euro.
Technical Outlook: Momentum studies are still bearish but are now at oversold levels and will tend tosupport reversal action if it occurs. The market’s short-term trend is negative as the close remains below the 9-day moving average. The downside closing price reversal on the daily chart is somewhat negative. The market’sclose below the pivot swing number is a mildly negative setup. The next downside target is now at 123.5600. Thenext area of resistance is around 124.7000 and 125.3600, while 1st support hits today at 123.8000 and belowthere at 123.5600.