The December Euro is finding moderate support at the start of the new trading week, but may have limited upside from these current price levels given the negative tone of global risk sentiment. Positive vibes from Greece and other peripheral trouble-spots, as well as relief that Italian political tensions have been diminished, are clearly helping the Euro shake off a portion of Friday’s downdraft. However, the Euro’s relatively subdued price action may be an early sign that a near-term top was put it with last Thursday’s post-ECB rally. The December Euro could lift back above the 136.04 level if events in Washington continue to hold the market’s attention, but will need to find fresh positive developments from their side of the Atlantic to rise back towards last week’s highs.
Technical Outlook
EUR (DEC): A bearish signal was triggered on a crossover down in the daily stochastics. Momentum studies trending lower from overbought levels isa bearish indicator and would tend to reinforce lower price action. The close above the 9-day moving average is a positive short-term indicator for trend. The close below the 1st swing support could weigh on the market. The next downside objective is 134.7850. The next area of resistance is around 136.0400 and 136.6650, while 1st support hits today at 135.1000 and below there at 134.7850