Look for a lower trade today as the EUR USD should continue to feel selling pressure as traders are shunning the higher yielding, riskier Euro. Expectations that the recession affecting the Euro Zone will continue to deepen is driving traders to the safety of the Dollar. Traders are expecting the European Central Bank to become more aggressive toward cutting interest rates in an effort to stimulate the Euro Zone economy. Start watching the Eastern European emerging markets for signs of economic uncertainty. This bad news could have a dramatic effect on the Euro and the Swiss Franc.

The U.S. Dollar is expected to continue to post gains against a basket of currencies on the news that China import growth slowed last month. Even though many analysts had predicted a slowdown in demand from Chinese consumers after the Olympics ended in August, the reality is China has joined the rest of the world in the widening, deepening, global recession. Traders are beginning to realize that the global economy is in a deep slowdown and will not recover quickly.

Crude oil closing under $60 and the plunge in gold prices is further evidence that global consumer demand for energy and worldwide inflation are expected to continue to fall. Clearly traders are focusing on the weakness in the global economy and treating the Dollar and the Yen as safe haven investments.

Technically, the EUR USD is in a downtrend and making lower-tops and lower-bottoms. The only thing that can change the pattern and the trend to up will be a breakout above one or both swing tops at 1.3116 and 1.3296. On the downside, the downtrend will resume on moves through 1.2525 and 1.2339. The pair of ranges that have been established have created pivot prices at 1.2813 and 1.2821. Currently the market is under this pivot zone which is a sign of weakness and lower prices to follow. Use this pivot zone as an early indicator of a possible change in trend to the upside. Otherwise continue to look for more downside pressure.