The Euro bulls have to be relieved in the currencies capacity to hold up in the face of news of acontraction in German 2nd quarter GDP especially since that news was accompanied by deflationary evidencefrom Euro zone CPI readings. We have to wonder how much more slowing should be anticipated in the Euro zoneas the escalation of sanctions against Russia largely took place after the end of second quarter and the threat ofeven more sanctions could become reality before the coming weekend if Putin authorizes an incursion into theUkraine. In retrospect, the Euro bulls have been temporarily saved by disappointing US data and that windfallmight extend through US 7:30 numbers before running its course. Therefore traders should look to be a buyer ofdips in the September Euro to 1.3345 this morning.
Technical Outlook: Daily stochastics are showing positive momentum from oversold levels, which shouldreinforce a move higher if near term resistance is taken out. A negative signal for trend short-term was given on aclose under the 9-bar moving average. The daily closing price reversal down is a negative indicator for prices.The market has a slightly positive tilt with the close over the swing pivot. The near-term upside target is at134.4675. The next area of resistance is around 134.0350 and 134.4675, while 1st support hits today at 133.3050and below there at 133.0075.