We are a little surprised to see the Euro holding above 1.1250 this morning because of renewed threats of more sanctions against Russia, smoldering uncertainty on what the newly elected Greek leadership will pursue with respect to its austerity package and also because of expectations of positive US scheduled data later this morning. Critical support in the March Euro is seen at 1.1229 and then not until the 1.1152 level. We fear a sell the rumor, buy the fact, reaction to the US FOMC meeting on Wednesday afternoon.
Technical Outlook: The sell-off took the market to a new contract low. The crossover up in the daily stochastics is a bullish signal. The stochastics indicators are rising from oversold levels, which is bullish and should support higher prices. The market’s close below the 9-day moving average is an indication the short-term trend remains negative. The upside daily closing price reversal gives the market a bullish tilt. The market has a slightly positive tilt with the close over the swing pivot. The next upside target is 114.1750. With a reading under 20, the 9-day RSI indicates the market is extremely oversold. The next area of resistance is around 113.3700 and 114.1750, while 1st support hits today at 111.3900 and below there at 110.2150.