One didn’t even need to look to the Euro chart to know that more lower-low action was underway, as Europe started 2015 with a flurry of slack economic readings and widespread talk of QE action ahead. While the Euro might see some minor short covering action in the wake of soft US data flows later this morning, the Euro has so many troubles that slack US scheduled data is hardly capable of altering the down-trend pattern. Downtrend channel resistance is seen today up at 1.2113.
Technical Outlook: The market was pushed to a new contract low. Momentum studies are still bearish but are now at oversold levels and will tend to support reversal action if it occurs. The market’s close below the 9-day moving average is an indication the short-term trend remains negative. The close below the 1st swing support could weigh on the market. The next downside target is now at 120.4950. The market is approaching oversold levels on an RSI reading under 30. The next area of resistance is around 121.4300 and 121.9750, while 1st support hits today at 120.6900 and below there at 120.4950.