For those of you who follow the euro, let's take an updated look at the continued plight of that currency for the past 14 months.

I thought the euro's three-month recovery rally from the November low would propel the currency to the 1.2500 area, but failed at 1.2320 prior to reversing to the downside with a vengeance. The rally represented a period of euro strength that worked off the oversold condition prior to the resumption of the dominant downtrend. At this point, although we could manufacture multiple reasons why the euro should be stronger against the dollar, current perceptions of still-rising U.S. interest rates, a sluggish European economy, and the continued threat of religious unrest in many european capitals is attracting flows into dollars (and into yen and gold to a lesser extent). Until those perceptions change, the dominant downtrend in the euro will persist.

Mike Paulenoff is a 25-year veteran of the financial markets and author of MPTrader.com, a real-time diary of his E-mini S&P and QQQQ technical analysis and trading alerts. For more of Mike Paulenoff, sign up for a FREE 30-Day Trial to his E-Mini/Index Futures diary, or try his QQQ Trading Diary.