After climbing past yesterday high by a single tick, the Euro has slumped back towards unchanged levelsearly this morning. While the German ZEW survey reached its highest level in over 4 years, sentiment readings -particularly from Germany – have been an area of strength so this morning’s number had only a limited impact onthe market. “Hard” data points such as Inflation, Unemployment and today’s weak Euro zone Construction Outputreading have been another matter, however, which clearly have been a major factor in the ECB’s rate cut decisionearlier this month. The December Euro may slide down towards the 134.82 level with today’s potential hookreversal setting the stage for further weakness over the next few sessions.
Technical Outlook
EUR (DEC): Rising from oversold levels, daily momentum studies would support higher prices,especially on a close above resistance. The market’s short-term trend is positive on the close above the 9-daymoving average. The market has a slightly positive tilt with the close over the swing pivot. The near-term upsidetarget is at 135.7550. The next area of resistance is around 135.4000 and 135.7550, while 1st support hits todayat 134.7200 and below there at 134.3950.