The December Euro has kept within a fairly tight range during the overnight session, but is showing little of the strong upside momentum that drove prices up to 8-month highs late last week. A lukewarm set of German Trade numbers and German Industrial Orders may provide a fresh source of headwinds for the Euro, but it has been the dampening of global risk sentiment from events in Washington that has put the brakes on the Euro’s longer-term uptrend. As long as peripheral EU trouble-spots remain quiet news-wise, the Euro should hold its ground above the recent lows but anyrally back towards last week’s highs will require fresh positive developments on both sides of the Atlantic. The December Euro should find near-term support around the 135.54 area, and will be able to avoid any sizable downdraft early this week as long as the market continues to focus on the ebb and flow of Washington budget discussions.
Technical Outlook
EUR (DEC): Momentum studies are trending lower from high levels which should accelerate a move lower on a break below the 1st swing support. The market’s close above the 9-day moving average suggests the short-term trend remains positive. It isa mildly bullish indicator that the market closed over the pivot swing number. The next downside target is now at 135.2575. The next area of resistance is around 136.0449 and 136.2375, while 1st support hits todayat 135.5550 and below there at 135.2575