A huge early-evening rally in the wake of the Bernanke comments drove the Euro up to a new 2 1/2 weekhigh, but there has been a significant change in tone as prices have slumped all the way into negative territorythis morning. A negative German PPI reading has underscored weak inflation levels throughout the Euro zone,which are likely to keep ECB firmly in an easier monetary stance going forward. With a potential downhook and amove back below its 50-day moving average to contend with, the Euro will need to see some weak US data and adovish tone out of the FOMC meeting minutes in order to avoid further chart damage. The December Euro mayfind near-term support around the 135.10 area, and will be paying very close attention to events across theAtlantic for direction.
Technical Outlook
EUR (DEC): Momentum studies are rising from mid-range, which could accelerate a move higher ifresistance levels are penetrated. The market’s short-term trend is positive on the close above the 9-day movingaverage. The market has a slightly positive tilt with the close over the swing pivot. The next upside objective is135.8750. The next area of resistance is around 135.6699 and 135.8750, while 1st support hits today at 135.0700and below there at 134.6750.