The Euro remains in a downdraft on its charts but talk of possible intervention in support of the Euro by the Swiss might provide some temporary cushion. However, slightly weaker than expected German and Eurozone September Manufacturing PMI results overnight would seem to leave the Euro mired in a fundamental downtrend. Press talk of the Euro potentially falling to parity with the Dollar might be a sign of excessive bearishness inthe marketplace but to alter the down trend in the Euro might require a string/trend of weaker than expected USdata ahead. Temporarily oversold but data is weak enough to see the Euro continue down to next critical weeklysupport zone of 1.25.
Technical Outlook: The market broke to a new contract low. The daily stochastics gave a bullish indicatorwith a crossover up. Rising from oversold levels, daily momentum studies would support higher prices, especiallyon a close above resistance. A negative signal for trend short-term was given on a close under the 9-bar movingaverage. The close below the 2nd swing support number puts the market on the defensive. The next upsideobjective is 127.7200. With a reading under 20, the 9-day RSI indicates the market is extremely oversold. Thenext area of resistance is around 127.0200 and 127.7200, while 1st support hits today at 125.7000 and belowthere at 125.0800.