The euro($EURUSD)  tested the 50% retracement of its run-up since July 12, which comes in near $1.4187.  The 61.8% retracement is found just above $1.41.  It is posting an outside down day.  A close below Friday's low near $1.4230 would seem to confirm, but follow through is critical.  The weakness of euro zone data may encourage the market to re-think the Q4 rate hike.  Trichet's comments at this week's press conference can help shape opinion.  

The US-German 2-year spread is near 75 bp now.  That is roughly a 17 bp decline over the past week and is the lowest since the third week in Feb.  It is off nearly 55 bp from its peak in early June.   This coupled with the technical price action of the euro warns of further downside potential and the market seems ill-positioned for.  I would show resistance now near $1.4230-50.  - M.Chandler