A modest improvement in global risk sentiment has provided little benefit to the Euro, as sluggisheconomic data from the region continues to be a source of headwinds this morning. Euro zone inflation was inlinewith forecasts but only recorded a 0.7% year-on-year gain, which underscores the weak inflation theme thatprompted the ECB to cut rates earlier this month. Unless global markets shift towards a “risk on” mood headinginto the weekend, it will be difficult for the Euro to recover beyond Wednesday’s weekly high. The December Euromay slide down towards the 134.20 area later this morning, and needs to see stronger economic numbers fromthe region and better global risk attitudes in order to regain the upside momentum seen earlier this week.
Technical Outlook
EUR (DEC): The market back below the 60-day moving average suggests the longer-term trendcould be turning down. Daily stochastics are showing positive momentum from oversold levels, which shouldreinforce a move higher if near term resistance is taken out. The market’s short-term trend is positive on the closeabove the 9-day moving average. The market’s close below the pivot swing number is a mildly negative setup.The near-term upside objective is at 135.3600. The next area of resistance is around 135.0100 and 135.3600,while 1st support hits today at 134.2500 and below there at 133.8400.