The Euro is catching some lift from ideas that the US Fed might remain on hold with respect to policystatement changes later today. The Euro is also seeing some short covering off the extending duration of theUkraine cease-fire. However, some resistance was thrown back into the equation yesterday with concerns thatBank stress tests might present challenges to many European institutions. Euro zone August inflation readingswere up +0.1% which is a little defeating after the initial projection for the report was pegged at +0.3%. Anotherheadline limiting the Euro this morning is concerning comments from the BOE as they suggested that there was”mounting evidence” of Eurozone weakness and that weakness was the result of Ukraine and Middle Eastproblems. While the Euro might rise off a status quo Fed result, the September Euro this morning is already 100points above the recent lows and we don’t like the risk and reward of being long the Euro today.
Technical Outlook: Daily momentum studies are on the rise from low levels and should accelerate a movehigher on a push through the 1st swing resistance. The close above the 9-day moving average is a positive shorttermindicator for trend. With the close higher than the pivot swing number, the market is in a slightly bullishposture. The next upside target is 130.4325. The next area of resistance is around 130.0550 and 130.4325, while1st support hits today at 129.3050 and below there at 128.9325.