While the German unemployment results were better than expected those results were mostly countervailed by Euro zone October Consumer confidence readings that remained deep in contractionaryterritory. While we can’t argue against more near term declines in the Euro, help is on the way for the Europeaneconomy in the form of very favorable exchange rates, lower oil prices, fresh QE and seeing the Germanunemployment readings fall sharply, suggests that the European growth engine is capable of regaining somefooting ahead. We see a potential bottom down at 1.2550 but fresh longs in the Euro need to use stops just belowthe 1.2510 level. However, to see a major low in the Euro and the start of an extended up trend pattern, probablyrequires a Ukraine/Russian Peace deal.
Technical Outlook: The downside crossover (9 below 18) of the moving averages suggests a developing short-term downtrend. Stochastics trending lower at midrange will tend to reinforce a move lower especially ifsupport levels are taken out. The close under the 18-day moving average indicates the intermediate-term trendcould be turning down. A negative signal was given by the outside day down. The market is in a bearish positionwith the close below the 2nd swing support number. The next downside objective is 125.3475. The next area ofresistance is around 127.1149 and 128.1275, while 1st support hits today at 125.7250 and below there at125.3475.