The brunt of the rise in the Euro this morning appears to be the result of a down shift in sentiment towardthe US Dollar. Even more surprising is the gains in the Euro this morning are being made in the wake of ECBcomments that they would be forced to act, if they see near term downside risks in price stability, as thatcommentary was made in the aftermath of some rather soft German inflation news. In other words, the ECBremains on guard against deflationary threats, but they don’t feel like they need to act now! Seeing the Euro risedespite renewed political battles in Italy, is also a little surprising but perhaps the Euro was lifted by predictionsthat European prices are likely to be lifted by surging energy prices. The path of least resistance is pointingupward in the Euro, but the bull camp lacks fundamental justification.
Technical Outlook: The major trend has turned down with the cross over back below the 60-day movingaverage. Momentum studies are trending higher from mid-range, which should support a move higher ifresistance levels are penetrated. The close below the 18-day moving average is an indication the intermediatetermtrend has turned down. The swing indicator gave a moderately negative reading with the close below the 1stsupport number. The near-term upside objective is at 136.9224. The next area of resistance is around 136.4050and 136.9224, while 1st support hits today at 135.4950 and below there at 135.1025.