Not surprisingly the euro is into fresh new lows on its charts in the wake of fresh favor toward the Dollar. What is surprising is that the Euro is not garnering consistent lift from what appears to be a generally improving global economic condition. In fact, the Euro has remained out of favor this morning despite a 7 month high in Euro zone business growth perhaps because of disappointing services data. Apparently Euro zone services firms have become the most optimistic in almost 4 years but in the short term, the Dollar’s interest rate and macro-economic differential edge looks to remain in place. More near term losses are expected in the Euro, at least into the Friday US payroll report.
Technical Outlook: Daily stochastics are trending lower but have declined into oversold territory. A negative signal for trend short-term was given on a close under the 9-bar moving average. It is a slightly negative indicator that the close was under the swing pivot. The next downside target is now at 111.1825. The market is approaching oversold levels on an RSI reading under 30. The next area of resistance is around 112.0650 and 112.4425, while 1st support hits today at 111.4350 and below there at 111.1825.