The December Euro is finding mild pressure this morning, but continues to hold its ground in close proximity to yesterday’s high for the move. With potential Italian political problems off the table for now, the market’s focus on other regions of the globe has helped the Euro remain fairly well supported in the wake of Wednesday’s spike rally. This weekend’s German elections are likely to send some longs to the sidelines, but as long as global risk appetites remain strong after the Fed’s tapering inaction, the Euro is unlikely to lose any sizable portion of recent gains. The December Euro may find enough long liquidation pressure to slide back towards the 135.10 area, but it is likely to finish out this week’s trading with a fairly healthy gain.
Technical Outlook
EUR (SEP): Momentum studies are trending higher but have entered overbought levels. The market’s close above the 9-day moving average suggests the short-term trend remains positive. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The next upside objective is 136.0450. The market is approaching overbought levels with an RSI over 70. The next area of resistance is around 135.6800 and 136.0450, while 1st support hits today at 135.0000 and below there at 134.6850.