The bull camp has hope ahead of the ECB easing decision but we are not sure that “hope” will last for long. Some bulls are suggesting that the recent jump in trading volume on the January bounce highlights a potential technical reversal in the Euro, but seeing renewed Russian incursions into the Ukraine and rising concerns toward Greece into this weekend’s election leaves the Euro facing significant headwinds to sustained growth. In the past, action from the ECB has mostly disappointed relative to expectations and with the March Euro trading above its recent lows and the market heavily entrenched in a downtrend pattern, we would suggest that traders look to sell an ECB inspired rally today back up to 1.1734.
Technical Outlook: 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 close below the 9-day moving average is an indication the short-term trend remains negative. With the close over the 1st swing resistance number, the market is in a moderately positive position. The next upside target is 117.5450. The 9-day RSI under 30 indicates the market is approaching oversold levels. The next area of resistance is around 116.8200 and 117.5450, while 1st
support hits today at 115.4200 and below there at 114.7450.