While the Euro saw supportive German retail sales readings and impressive European equity market action of late, Euro zone January producer prices fell at the fastest pace in nearly 5 years. With ongoing technical damage on the Euro charts, entrenched optimism toward the Dollar and widespread expectations of a June rate hike, the path of least resistance in the Euro looks to remain down. A pattern of lower highs on the Euro charts leaves significant resistance up at 1.1338 today, and that resistance line falls down to 1.1324 on Wednesday.
Technical Outlook: Momentum studies are still bearish but are now at oversold levels and will tend to support reversal action if it occurs. The close below the 9-day moving average is a negative short-term indicator for trend. It is a slightly negative indicator that the close was lower than the pivot swing number. The next downside target is 111.1125. With a reading under 30, the 9-day RSI is approaching oversold levels. The next area of resistance is around 112.2350 and 112.7325, while 1st support hits today at 111.4250 and below there at 111.1125.