Early strength helped to lift the Euro up into new high ground once again, but lukewarm economic datacontinues to inject a note of caution into the market. Today’s German IFO business survey made a surprisedowntick, and along with yesterday’s Euro zone service-sector “flash” PMI readings are making it difficult for theEuro to sustain any decisive move beyond the 138.00 level. While there still appears to be further upside left to gobefore prices get “top-heavy”, the Euro may have to rely on weak US data points later this morning beforeregaining upside momentum. The December Euro should find early support around the 137.74 level, and withnearly 3 cents in gain this month it remains vulnerable to a near-term pullback before starting another leg higher.
Technical Outlook
EUR (DEC): The rally brought the market to a new contract high. Rising stochastics at overboughtlevels warrant some caution for bulls. A positive signal for trend short-term was given on a close over the 9-barmoving average. The market has a slightly positive tilt with the close over the swing pivot. The near-term upsideobjective is at 138.5975. With a reading over 70, the 9-day RSI is approaching overbought levels. The next areaof resistance is around 138.3150 and 138.5975, while 1st support hits today at 137.7050 and below there at137.3775.