The Euro remains the whipping post! German bond buyers are paying the German government to hold their money for 1 year and that should highlight the desire to hold anything but Euros. More importantly theimplementation of additional EU and US sanctions against Russia has resulted in certain EU officials complainingthat the sanctions are causing more economic damage in the EU than in Russia and that in turn should emboldenRussia to act badly again. The Euro is also set to be on the receiving end of the expectation of tightening from theUS Fed. In retrospect, the recent bounce and slight consolidation effort of the last week has probably balancedoversold technical readings and that could set the table for a fresh downside breakout today. We suspect theDecember Euro is set to retest the lowest levels since July of 2013 down at 1.2850.
Technical Outlook: The stochastics indicators are rising from oversold levels, which is bullish and shouldsupport higher prices. The market’s short-term trend is negative as the close remains below the 9-day movingaverage. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The nextupside objective is 129.7949. The 9-day RSI under 30 indicates the market is approaching oversold levels. Thenext area of resistance is around 129.4999 and 129.7949, while 1st support hits today at 128.9400 and belowthere at 128.6750.