As suggested in Dollar coverage, French Industrial Production declined in the latest readings off expectations of a slight gain and that should leave the Euro off balance and vulnerable. Adding into the bearish tilt toward the euro is comments from an ECB official that the bank would have cut rates in their last meeting if rates weren’t already at zero! Nothing breeds negative sentiment toward a currency more than an official admitting that something should have been done but wasn’t. If the EU economy was too slow and in need of assistance then
they should have turned to QE instead of promising QE early next year. Sell down trend channel resistance of 1.2445.
Technical Outlook: The daily stochastics gave a bullish indicator with a crossover up. Daily stochastics are showing positive momentum from oversold levels, which should reinforce a move higher if near term resistance is taken out. The market’s close below the 9-day moving average is an indication the short-term trend remains negative. The market setup is supportive for early gains with the close over the 1st swing resistance. The nearterm upside objective is at 125.3525. The next area of resistance is around 124.5650 and 125.3525, while 1st support hits today at 122.9950 and below there at 122.2125.