Although the market was already sliding back from a failed attempt to climb through the 134.50 level, alukewarm reception for this morning’s Euro Zone Industrial Production number has helped to push the Euro downinto negative territory this morning. With a sharp drop in inflation and record high unemployment still casting along shadow over the market, the Euro needs to receive some definitively positive news from the Euro zone datafront in order to sustain this week’s recovery. With ECB officials throwing out hints of further easing measures tocome, the Euro also needs to have EU trouble spots such as Italy and Greece stay off the market’s radar as well.The December Euro should find near-term support around the 133.90 area and will be looking for dovish Feddialogue and a rebound in global risk sentiment in order to relieve this morning’s early pressure.
Technical Outlook
EUR (DEC): Daily stochastics declining into oversold territory suggest the selling may be drying upsoon. The close below the 9-day moving average is a negative short-term indicator for trend. With the closehigher than the pivot swing number, the market is in a slightly bullish posture. The next downside objective is nowat 133.2400. The next area of resistance is around 134.8500 and 135.2000, while 1st support hits today at133.8700 and below there at 133.2400.