The Euro remains in a liquidation bias this morning despite scheduled data flows this morning that shouldhave provided some support! In other words, the Euro trade also appears to think that Yellen will generally lean infavor of leaving the tapering threat in place and that in turn might mean the Fed Chairman will lay a lot of blameon the Jan/Feb slowing on the weather. Therefore we can’t rule out a possible return to the 1.36 level with interimsupport seen initially today at 1.3629. Traders might see a slight bounce off US durables but the big pivot of theday might come from the Fed testimony question and answer period. It is also possible that hints of Euro zonedeflation from Germany could add to the downside tilt in the Euro, after the dust of the Fed dialogue has settled.
Technical Outlook: A crossover down in the daily stochastics is a bearish signal. Momentum studies aretrending lower from high levels which should accelerate a move lower on a break below the 1st swing support. Anegative signal for trend short-term was given on a close under the 9-bar moving average. The market is in abearish position with the close below the 2nd swing support number. The next downside objective is 136.0050.The next area of resistance is around 137.3200 and 137.9250, while 1st support hits today at 136.3600 and belowthere at 136.0050.