The December Euro has remained subdued during overnight trading, and has gravitated towards the middle portion of this week’s “island” trading range. While recent signs of growth have helped the Euro maintain an uptrend in the wake of the US Payroll data earlier this month, another key supportive factor has been the relative news silence from EU trouble spots. While Italian political turbulence may become a front-and-center issue in the near future, today’s focus is likely to hinge on Fed tapering measures. Given the recent inability for prices to sustain any move above the 134.00 level, the Euro may be showing signs of being top-heavy and will find additional pressure if the FOMC decides to start tapering measures later today. The December Euro should find decent support around the 133.35 area during the early part of today’s session, but could make a quick move back into last week’s consolidation price zone if the Fed decides to start their tapering measures.
Technical Outlook
EUR (SEP): Rising stochastics at overbought levels warrant some caution for bulls. The market’s short-term trend is positive on the close above the 9-day moving average. The upside closing price reversal on the daily chart is somewhat bullish. The market has a slightly positive tilt with the close over the swing pivot. The near-term upside target is at 134.0500. The next area of resistance is around 133.8500 and 134.0500, while 1st support hits today at 133.3700 and below there at 133.0900.