The September Euro has given up modest gains early this morning, and is showing surprisingly little positive reaction so far to this morning’s economic data from the region. Euro zone, German and French GDP readings were all marginally better than market forecasts, although growth levels remain lukewarm and are well below those seen across the Atlantic. While there are indications that the overall Euro zone may be coming out of its recession, the ECB will likely have to remain in an accommodative monetary policy stance well into the future. Unless there is a notable improvement with global risk appetites later today, it will be difficult for the Euro to make any sizable recovery from this week’s early losses. The September Euro should find decent support around the 132.34 area, and should be able to avoid any large-scale setback just as long as peripheral EU risk problems remain on summer holiday.
Technical Outlook
EUR (SEP): Momentum studies trending lower at mid-range should accelerate a move lower if support levels are taken out. The market back below the 18-day moving average suggests the intermediate-term trend could be turning down. The close below the 1st swing support could weigh on the market. The next downside objective is now at 131.8675. The next area of resistance is around 133.0849 and 133.5675, while 1st support hits today at 132.2350 and below there at 131.8675.