A massive downside extension in the Euro was largely the result of the SNB cap removal and a wave of uncertainty regarding the viability of the European economy in the face of an ever increasing level of financial market uncertainty. Seeing the Swiss add pressure to the Euro logically pressed the Euro into new lows and that development might mean the Euro is poised to remain under pressure from both the Dollar and the Swiss ahead. The market simply doesn’t care that the Germany saw private consumption rise by 1.5% in 2014 and that Italy might be set to get additional budget leeway in the face of extending deflationary pressures. Talk that French banks might reduce rates paid on savings account contributes to the deflationary tidal wave. While it might be difficult to push the Euro back down to the overnight lows, the trend looks set to remain down.
Technical Outlook: The sell-off took the market to a new contract low. Daily momentum studies are on the rise from low levels and should accelerate a move higher on a push through the 1st swing resistance. The market’s short-term trend is negative as the close remains below the 9-day moving average. The daily closing price reversal up is a positive indicator that could support higher prices. It is a slightly negative indicator that the close was lower than the pivot swing number. The near-term upside objective is at 119.1300. The 9-day RSI under 30 indicates the market is approaching oversold levels. The next area of resistance is around 118.5200 and 119.1300, while 1st support hits today at 117.3200 and below there at 116.7300.