The December Euro has been able to hold its ground within yesterday’s price range this morning, but clearly is having trouble extending this current up move heading into the weekend. A sluggish Euro zone PPI reading this morning may provide the ECB with some food for thought, but post-meeting comments from ECB President Draghi appear to push any fresh easing measures well into the future. Signs of sustained growth throughout the region, subdued risk concerns from Italy and the market’s focus on Washington should help to underpin the Euro in close proximity to these recent highs. However, end-of-week long liquidation may keep the Euro somewhat on the defensive as global markets are still some distance away from regaining a full-scale “riskon” mood. The December Euro should find near-term support around the 135.82 area, but will remain comparatively well-supported as long as EU trouble spots continue to stay out of market news headlines
Technical Outlook
EUR (DEC): Studies are showing positive momentum but are now in overbought territory, so some caution is warranted. 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 next upside target is 136.8725. The market is approaching overbought levels with an RSI over 70. The next area of resistance is around 136.5650 and 136.8725, while 1st support hits today at 135.8750 and below there at 135.4925.