Positive signs of growth from the region have not been enough for the Euro to carry last week’s recoveryrally through the weekend, as a decent reading on Euro zone Industrial Production generated little upside followthrough.Comments by a key policymaker that the ECB was “ready” for negative interest rates may have giventhe market pause for thought this morning, but that comes after ECB President Draghi avoided any overtly dovishtalk while he was in the US last week. Difficulties with Germany forming a ruling coalition may also be dampeningEuro zone sentiment early this week, but positive vibes out of Greece and Portugal as well as subdued peripheralEU debt yields have helped the Euro hold its ground well inside of Friday’s trading range. The December Euromay pull back towards the 135.42 area early today, but will remain fairly well supported as long as Washingtonbudget acrimony holds onto the market’s focus.
Technical Outlook
EUR (DEC): Stochastics trending lower at midrange will tend to reinforce a move lower especially ifsupport levels are taken out. The market now above the 18-day moving average suggests the intermediate-termtrend has turned up. The close over the pivot swing is a somewhat positive setup. The next downside target isnow at 134.8800. The next area of resistance is around 135.7699 and 136.1200, while 1st support hits today at135.1500 and below there at 134.8800.