The Euro zone economic outlook remains suspect in the wake of news that December sentiment was unchanged in the Euro zone while German industry orders fell in November. With the Fed also acknowledging the vulnerability of areas outside of the US and the economic report bar for the Dollar at a very low level, almost anything positive from the US today or Friday should facilitate even more new lows for the move in the Euro. Down trend channel resistance is seen today at 118.86 and that resistance line falls down to 118.30 on Friday.
Technical Outlook: The market made a new contract low on the break. Momentum studies are declining, but have fallen to oversold levels. The market’s close below the 9-day moving average is an indication the shortterm trend remains negative. The close below the 1st swing support could weigh on the market. The next downside target is now at 117.5575. The 9-day RSI under 20 suggests the market is extremely oversold. The next area of resistance is around 118.9250 and 119.4575, while 1st support hits today at 117.9750 and below there at 117.5575.