With the ECB meeting in its rear-view mirror, the Euro has held onto a large portion of Thursday’s upsidebreakout heading into this morning’s trading. A weaker than expected German Industrial Orders reading has beena fresh source of pressure, but the Euro remains well supported from the afterglow of yesterday’s ECB meeting.ECB President Draghi managed to wrong-foot the market once again with his post-meeting comments, as theiroptimistic outlook on Euro zone growth and inflation clearly surprised many traders who were expecting furtherdovish guidance in both areas. While the ECB looks to be in an accommodative stance going forward, the lack offresh easing prospects as well as lower risk concerns from EU trouble-spots should leave the Euro fairly wellsupported this morning. However, the severity of yesterday’s rally has left the Euro vulnerable to a sharp pullbackif today’s US jobs can exceed market expectations. The December Euro may slide down towards the 136.50 levelin front of the US jobs data, but should hold onto this recent uptrend now that the ECB meeting has been digestedby the market.
Technical Outlook: Daily stochastics have risen into overbought territory which will tend to support reversalaction if it occurs. The market’s close above the 9-day moving average suggests the short-term trend remainspositive. The market has a bullish tilt coming into today’s trade with the close above the 2nd swing resistance. Thenext upside objective is 137.7375. The next area of resistance is around 137.3450 and 137.7375, while 1stsupport hits today at 135.9950 and below there at 135.0375.