There has been little follow-through from Monday’s reversal for the Euro this morning, although priceshave been able to hold their ground well clear of yesterday’s lows. A weak Euro zone PPI reading hasunderscored the region’s low inflation levels, and has put even more emphasis on Thursday’s ECB meeting as a source of near-term headwinds for the Euro this morning. EU risk concerns and peripheral debt yields remainback-burner issues for now, however, which should provide enough underlying support to prevent a near-termretest of Monday’s spike lows. The December Euro should find decent support around the 134.80 area duringtoday’s trading, but the region’s lukewarm data results will make it very difficult to fully shake off the potential forfresh ECB easing measures until Thursday’s meeting results and post-meeting comments have been fullydigested by the market.
Technical Outlook
EUR (DEC): Momentum studies are still bearish but are now at oversold levels and will tend tosupport reversal action if it occurs. A negative signal for trend short-term was given on a close under the 9-barmoving average. The daily closing price reversal up on the daily chart is somewhat positive. The market has aslightly positive tilt with the close over the swing pivot. The next downside objective is 134.1600. The next area ofresistance is around 135.5800 and 135.8400, while 1st support hits today at 134.7400 and below there at134.1600.