With the ECB giving off hints of fresh stimulus action overnight one might expect this week’s highs in the Euro to become more significant resistance. Unfortunately for the bull camp Russian/Ukraine talks failed to yieldforward progress and therefore we are not hopeful that the Euro will be able to extend the recent bounce off theOctober lows. A portion of the run up in the Euro this week was the result of US Ebola fears and without freshexposures we would not be paying up for Euro longs 200-300 points above the October lows! In fact, ongoingconcerns of slowing in the Euro zone have not been removed and seeing positive US scheduled data later thismorning might be cause for a modest slide in the Euro. Near term downside potential in the December Euro isseen at 1.2781.
Technical Outlook: The upside crossover (9 above 18) of the moving averages suggests a developingshort-term uptrend. Momentum studies are trending higher from mid-range, which should support a move higher ifresistance levels are penetrated. The market’s short-term trend is positive on the close above 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 129.3625. The next area of resistance is around 128.8349 and 129.3625, while 1st supporthits today at 127.4450 and below there at 126.5825.