The lower end of the euro's trading range is also seen by some technicians as the neckline of a larger head-and-shoulder's topping pattern, which if broken projects toward $1.25.

Based on current spot and volatility levels, indicative pricing suggests almost a 50% chance of testing the mid-January low near $1.26 here in the second quarter.

6. We have often found that the euro is sensitive to changes in the interest rate differential between the U.S. and Germany.

In the past, a flare up in the European debt crisis has led to safe-haven flows into Germany, pushing down its interest rates and widening the differential in the U.S.'s favor.

Although we have highlighted the risk of the re-emergence of eurozone tensions, growth differentials also seem to be fueling a widening of the interest rate spreads. The 10-year spread is at its widest level since mid-2010.

The two-year differential is near its best levels since then, having risen from about 2 basis points after a seemingly dovish talk by Federal Reserve Chairman Ben Bernanke near the Ides of March to 17 basis points earlier Wednesday.

7. The correlation between the euro and the S&P 500 (60-day period on percent change) has fallen nearly in half from a record high in early December of 0.85 to 0.43 in late March.

The correlation has begun stabilizing, as has the 30-day correlation. Short-term market participants should be prepared for a tighter correlation in the second quarter.
This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.