While the Euro forged a lower low overnight, it has forged a rebound in the face of residual concerns toward Greece and ECB easing policy conflict. Positive German wage data from the 3rd quarter adds to the slightly positive track in the Euro this morning and perhaps a dip in US existing home sales figures later this morning will provide additional short covering action. Initial resistance is seen up at 1.2312 and support moves up to 1.2250. The Commitments of Traders Futures and Options report as of December 16th for Euro showed the Non-Commercial and Non-reportable combined traders held a net short position of 172,358 contracts.
Technical Outlook: The market broke to a new contract low. Daily stochastics are trending lower but have declined into oversold territory. The close below the 9-day moving average is a negative short-term indicator for trend. The close below the 1st swing support could weigh on the market. The next downside target is 121.7325. The next area of resistance is around 122.8349 and 123.3925, while 1st support hits today at 122.0050 and below there at 121.7325.