Events across the Atlantic are also keeping the Euro fairly subdued, although prices have stayed wellclear of Tuesday’s spike low this morning. Today’s Euro zone inflation readings provided few surprises as theyear-on-year number came in at a 31/2-year low, and that provided fuel for fresh ECB easing measures on thenear-term horizon. While positive developments from Greece, Portugal and Ireland this week have helped theEuro overcome yesterday’s downdraft, another retest of the late September lows may be in the cards if USpoliticians are able to get a budget deal completed later today. The December Euro could rise up towards the135.58 resistance level early today, but will have trouble gaining further ground as long as the market feels thatthat there is forward progress with completing a US budget deal in the near future.
Technical Outlook
EUR (DEC): Stochastics trending lower at midrange will tend to reinforce a move lower especially ifsupport levels are taken out. The intermediate trend has turned down with the cross over back below the 18-daymoving average. The market setup is somewhat negative with the close under the 1st swing support. The nextdownside objective is now at 134.3100. The next area of resistance is around 135.6400 and 136.1500, while 1stsupport hits today at 134.7200 and below there at 134.3100.