The September Euro has given back little of yesterday’s sharp recovery rally, as prices have stayed within a tight trading range during the overnight session. This morning’s Euro zone inflation reading was in-line with market forecasts, and has finished off a week in which the region’s economic data generally avoided any negative surprises. While there has been a modest rise in peripheral EU debt yields, there have been no headline-grabbing risk flare-ups that could have eroded Euro sentiment going into the weekend. As long as the market’s focus remains on other regions of the globe, the Euro should be able to avoid any late week downdrafts. The September Euro may find support around the 133.16 area later today, and should consolidate yesterday’s recovery through the rest of this week’s trading.
Technical Outlook
EUR (SEP): Momentum studies trending lower at mid-range should accelerate a move lower if support levels are taken out. The cross over and close above the 18-day moving average indicates the intermediate-term trend has turned up. The outside day up is a positive signal. The market has a bullish tilt coming into today’s trade with the close above the 2nd swing resistance. The next downside objective is 131.6375. The next area of resistance is around 134.3450 and 134.7775, while 1st support hits today at 132.7750 and below there at 131.6375.