After being unable to put any near-term brakes on this morning’s sharp downdraft, the Euro remains wellbelow the 136.00 level and its 50-day moving average coming into this morning’s trading. While today’s majorEuro zone PMI manufacturing numbers were mostly in-line, a surprising drop in the Spanish reading has spookedthe market as recent positive vibes from that nation has been a key factor in the Euro’s recent strength. Inaddition, tensions in the Ukraine are likely to cast a shadow over the Euro until they are diffused. Last Friday’simprovement with Euro zone Unemployment and Inflation should help to keep the ECB from making any fresheasing moves at this week’s meeting, but the Euro may be in need of stronger data readings from outside ofGermany in order to revive its current uptrend. The December Euro should find decent support around the 135.18level, but may have to rely on sluggish US data in order to bounce back from early pressure.
Technical Outlook
EUR (DEC): Rising stochastics at overbought levels warrant some caution for bulls. The market’sshort-term trend is positive on the close above the 9-day moving average. The market has a slightly positive tiltwith the close over the swing pivot. The next upside objective is 136.3975. The next area of resistance is around136.1550 and 136.3975, while 1st support hits today at 135.7450 and below there at 135.5775.