While the Euro has remained within the prior session’s range and has failed to breakout to the upside inthe face of positive German Ifo Business climate gains, we have to leave the edge with the bull camp. However,the inability to remain near yesterday’s highs is a little discouraging, especially since competition in the currencymarkets is extremely thin. Perhaps the Euro factored in the German numbers and also has factored a rise in USclaims with the highs this morning and to continue on the upside tilt might require a 10,000 to 15,000 increase inUS claims later this morning. Limiting the Euro on the upside is the prospect for a 2% gain in US durable goods.Critical support is seen at 1.3797 and then again down at 1.3785. We don’t like the long side of the Euro, butpushed into the market today we would favor the upside.
Technical Outlook: The cross over and close above the 40-day moving average indicates the longer-termtrend has turned up. Stochastics trending lower at midrange will tend to reinforce a move lower especially ifsupport levels are taken out. The market’s close below the 9-day moving average is an indication the short-termtrend remains negative. It is a mildly bullish indicator that the market closed over the pivot swing number. Thenext downside target is now at 137.6325. The next area of resistance is around 138.4350 and 138.7724, while 1stsupport hits today at 137.8650 and below there at 137.6325.