Some badly-needed “good news” from this morning’s Service-Sector PMI readings and from GermanIndustrial Orders has helped the Euro regain upside momentum and climb past its 50-day moving average again,but an inability to rise well clear of Monday’s high may show a note of caution in front of tomorrow’s ECB meeting.Weak inflation and record-high Unemployment are not going away anytime soon, and have ramped upspeculation that the ECB will start fresh easing measures by the end of this year. However, this week’s generallypositive Euro zone data readings and a 3 cent pullback from the late October highs may be enough to keep theECB from taking action tomorrow morning. The December Euro may slide back towards the 134.90 area latertoday, and clearly needs to put tomorrow’s ECB meeting results in its rear-view mirror before making any extended recovery from these current price levels.
Technical Outlook
EUR (DEC): Daily stochastics declining into oversold territory suggest the selling may be drying upsoon. The market’s short-term trend is negative as the close remains below the 9-day moving average. Themarket’s close below the 1st swing support number suggests a moderately negative setup for today. The next downside target is 134.0600. The next area of resistance is around 135.1000 and 135.5400, while 1st support hitstoday at 134.3600 and below there at 134.0600.