The Euro avoided a fresh new low for the move overnight but the down trend is hardly complete. Granted,the Euro might be expected to garner some support from the fact that Euro zone inflation readings overnight were”not as weak as was feared”. However, to call for a major low in the Euro, is extremely difficult and premature asthe trade will have to see a lot of evidence of recovery from the Euro zone and the Euro will also have to feel thepressure of the upcoming QE before the pain in the Euro fully runs its course. Traders should sell rallies in theEuro looking for at least a return to and below the early October low of 1.2514.
Technical Outlook: Momentum studies are declining, but have fallen to oversold levels. The market’s closebelow the 9-day moving average is an indication the short-term trend remains negative. The market tilt is slightlynegative with the close under the pivot. The next downside target is 125.0925. The next area of resistance isaround 126.6050 and 126.9925, while 1st support hits today at 125.6550 and below there at 125.0925.