The December Euro has held its ground within a fairly tight trading range during the overnight session, but may be vulnerable to fresh pressure from this morning’s events. Today’s ECB meeting in Paris is unlikely to result in any changes to Euro zone monetary policy, but will likely be a source of fresh dovish commentary from ECB President Draghi at the post-meeting press conference. Indications that the Italian ruling coalition will survive a confidence vote, due to a “rebellion” from several members of Silvio Berlusconi’s PDL party to support the government, has provided some near-term relief for the Euro but may not have any lasting impact once the vote has concluded. The December Euro may slide back towards the 135.08 level after the ECB have had their say later today, but will generally remain well supported within this recent consolidation price zone once the market’s focus shifts back towards events in Washington.
Technical Outlook
EUR (DEC): 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. It is a mildly bullish indicator that the market closed over the pivot swing number. The near-term upside objective is at 136.1449. The next area of resistance is around 135.6599 and 136.1449, while 1st support hits today at 134.9400 and below there at 134.7050.