While the Euro managed a fresh upside breakout overnight, paying up for the Euro so far off its recentlows and in the face of threats of a halt in natural gas flows seems to be precarious. In fact, with Draghi overnightsuggesting that the ECB was poised to implement QE to counter deflationary threats, we see the Euro around the1.39 level as a currency priced for perfection. From the central banker statements it is clear that the ECB isseeing deflation as the primary risk for EU policy makers. Aggressive traders should look to get short the Euro ona rally to 1.3914 looking for a downside target of 1.37.
Technical Outlook: Stochastics are at mid-range but trending higher, which should reinforce a move higherif resistance levels are taken out. A positive signal for trend short-term was given on a close over the 9-barmoving average. The market has a slightly positive tilt with the close over the swing pivot. The next upsideobjective is 139.4000. The next area of resistance is around 139.1800 and 139.4000, while 1st support hits todayat 138.5400 and below there at 138.1200.