While the Euro has managed to respect this week’s consolidation lows of 1.3160 in the wake of potentially critical Euro zone inflation results early this morning some traders were hopeful that the readings on inflationwould be weak enough to definitively rekindle easing prospects in next week’s ECB meeting. However, someeconomists see the inflation readings as a factor that eventually prompts the ECB to act. In short, the Euroremains vulnerable to the inevitable easing from the ECB especially since it appears that the drag from theUkraine affair is set to increase rather than abate ahead. Therefore traders should be sellers of rallies in the Euro,looking for the currency to finish the week in new low ground.
Technical Outlook: Daily stochastics declining into oversold territory suggest the selling may be drying upsoon. A negative signal for trend short-term was given on a close under the 9-bar moving average. The downsideclosing price reversal on the daily chart is somewhat negative. It is a slightly negative indicator that the close waslower than the pivot swing number. The next downside objective is now at 131.2500. With a reading under 30, the9-day RSI is approaching oversold levels. The next area of resistance is around 132.1400 and 132.4900, while1st support hits today at 131.5200 and below there at 131.2500.