The euro is probably short term technically oversold and in need of a temporary recovery bounce as the fundamental news from the Euro zone has hardly changed. In fact, German imports overnight declined sharply in what is supposed to be the strongest component of the Euro zone economy. Another issue that is limiting the Euro is suggestions from several EU leaders that Russian action in the Ukraine is serving to destabilize a large portion of Eastern Europe and without signs of a positive Ukraine endgame, buyers of the Euro are betting against a landslide of soft data. Down-trend channel resistance is seen up at 1.2435 but that falls to 1.2423 on Wednesday. Sell rallies in the Euro to 1.24.
Technical Outlook: The sell-off took the market to a new contract low. Daily stochastics are trending lower but have declined into oversold territory. The market’s short-term trend is negative as the close remains below the 9-day moving average. The daily closing price reversal up on the daily chart is somewhat positive. It is a mildly bullish indicator that the market closed over the pivot swing number. The next downside target is now at 122.1400. The next area of resistance is around 123.6899 and 124.1000, while 1st support hits today at 122.7100
and below there at 122.1400.