The Euro is finding moderate strength, but remains well inside of Wednesday’s trading range and is stillwell below the key 1.2500 level coming into this morning’s trading. Today’s set of German and Italian inflationdata were generally in-line with market forecasts, but stronger numbers from France hold out some hope that thebroad Euro zone inflation reading on Friday can at least match if not beat expectations. Even so, deflation iscasting a long shadow over both the Euro zone and the ECB, so the Euro will need to see consistently strongerdata as well as lower Ukraine/Russian tensions in order to lift clear of the early November consolidation pattern.Even with sluggish Jobless Claims data later today, traders should view a move above the 1.2515 level as anopportunity to get short the Euro.
Technical Outlook: Daily stochastics are showing positive momentum from oversold levels, which shouldreinforce a move higher if near term resistance is taken out. The close below the 9-day moving average is anegative short-term indicator for trend. The market’s close below the pivot swing number is a mildly negativesetup. The near-term upside objective is at 125.2875. The next area of resistance is around 124.7750 and125.2875, while 1st support hits today at 123.9850 and below there at 123.7075.