The headlines overnight tout a long slow recovery process in the Euro zone and that restrains the upwardtilt in the Euro. Another issue that might thicken overhead resistance in the Euro, is lingering threats that the ECBmight be forced to take action against further appreciation in the Euro. Declining volume since early this monthsuggests that Euro pricing around 1.39 might be viewed as expensive, especially if Euro zone data fails toimpress, as 1.39 pricing puts the Euro up significantly from year ago levels. We just don’t think the Euro has thefundamental case to rise to and hold above the 1.39 level. We suggest that traders be sellers of rallies in theEuro.
Technical Outlook: Momentum studies are declining, but have fallen to oversold levels. Themarket’s close below the 9-day moving average is an indication the short-term trend remains negative. Themarket’s close below the pivot swing number is a mildly negative setup. The next downside objective is now at79.10. With a reading under 30, the 9-day RSI is approaching oversold levels. The next area of resistance isaround 79.61 and 79.84, while 1st support hits today at 79.25 and below there at 79.10.