The Euro has been repeatedly pressured by negative developments in the Ukraine and from the threat ofeven more sanctions against Russia and therefore the news of a cease-fire overnight alleviates the pressure onthe Euro and allows for a short covering effort. With positive Euro zone August Services PMI results overnight andthe cease-fire news, we can’t rule out a rebound attempt to perhaps the 1.3185 level. However, for the Euro tomaintain a positive track clearly requires respect for the cease-fire agreement. Another issue that is likely to limitthe upside in the Euro today is US scheduled data which is generally expected to come in positive. The overalltrend remains down but today offers a temporary reprieve for the Euro.
Technical Outlook: Momentum studies are still bearish but are now at oversold levels and will tend tosupport reversal action if it occurs. A negative signal for trend short-term was given on a close under the 9-barmoving average. The market tilt is slightly negative with the close under the pivot. The next downside target isnow at 131.0175. The 9-day RSI under 30 indicates the market is approaching oversold levels. The next area ofresistance is around 131.4649 and 131.5575, while 1st support hits today at 131.1950 and below there at131.0175.