A fresh upside breakout in the Euro was seen overnight despite a number of May Day holiday closures inEurope. Perhaps the Euro is garnering some lift from favorable UK manufacturing data or perhaps the Euro hasremained in favor because of ideas that the US Fed is effectively pushing back its timing for higher rates in theUS. Other traders think that comments from the ECB, discounting the prospect of more easing is behind thestrength in the Euro, but we also think that the ECB might be inclined to change its tune, in the event that the Eurorises above the March highs of 1.3966 into and through the US payroll release. Some might even suggest that theEuro is rushing to price in a weak US payroll release on Friday morning. The bulls control but we want no part ofbuying the Euro at current levels.
Technical Outlook: The cross over and close above the 40-day moving average is an indication the longertermtrend has turned positive. The daily stochastics gave a bullish indicator with a crossover up. Positivemomentum studies in the neutral zone will tend to reinforce higher price action. The close above the 9-daymoving average is a positive short-term indicator for trend. The upside daily closing price reversal gives themarket a bullish tilt. A positive setup occurred with the close over the 1st swing resistance. The next upside targetis 139.5375. The next area of resistance is around 139.2150 and 139.5375, while 1st support hits today at138.1250 and below there at 137.3575.