The December Euro is finding moderate support this morning, but has been unable to move beyond last night’s spike rally up to a new 8-month high. Today’s set of Euro zone non-Manufacturing PMI numbers continue to show steady growth for the region, although a disappointing reading for German service-sector industries may give some pause for thought, a stronger than expected Euro zone Retail Sales number will help to reinforce this current uptrend. Yesterday’s ECB meeting provided some limited pieces of dovish dialogue, but much less than the market was expecting which has helped the Euro maintain upside momentum in spite of lukewarm global risk attitudes. With Italian political problems pushed to a back-burner issue with yesterday’s confidence vote, the Euro should remain at fairly elevated price levels even with Washington budget problems dominating global markets. The December Euro could pull back towards the 135.90 level later this morning, but will remain well supported in close proximity to new high ground.
Technical Outlook
EUR (DEC): Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. The close above the 9-day moving average is a positive short-term indicator for trend. The upside daily closing price reversal gives the market a bullish tilt. With the close over the 1st swing resistance number, the market is in a moderately positive position. The next upside target is 136.7424. With a reading over 70, the 9-day RSI is approaching overbought levels. The next area of resistance is around 136.3550 and 136.7424, while 1st support hits today at 135.3250 and below there at 134.6825.