Evidence of stimulus action from the ECB leaves the Euro in a downward trajectory especially in the wakeof the FOMC press conference that warned of the prospects of a sharper than expected US rate rise, once ratesstart to rise. Other issues pressing on the Euro is concern that Russia might use gas as a weapon against theUkraine and Europe this winter, as some customers of Russian energy companies are seeing reduced supplyflows this week. As mentioned in Dollar coverage, the Swiss saw disappointing export data and given the sharpslide in the Euro and Swiss exchange rates over the last 6 months, export data from the region should beimproving! Without the technically oversold condition of the Euro we would have almost nothing positive to say!
Technical Outlook: A bearish signal was triggered on a crossover down in the daily stochastics. Dailystochastics declining into oversold territory suggest the selling may be drying up soon. The market’s close belowthe 9-day moving average is an indication the short-term trend remains negative. The defensive setup, with theclose under the 2nd swing support, could cause some early weakness. The next downside target is now at127.7150. Some caution in pressing the downside is warranted with the RSI under 30. The next area ofresistance is around 129.4600 and 130.3550, while 1st support hits today at 128.1400 and below there at127.7150.