In addition to weaker than expected inflationary data from Italy, the euro is also seeing some pressure from residual Greek political turmoil. Another issue undermining the Euro is reports of slack November lending activity in the euro zone as that in turn has sparked fresh talk of even more ECB easing ahead. Significant resistance in the March Euro is seen up at 1.2196 and aggressive traders might be fresh sellers of the Euro on a return to that area.
Technical Outlook: The market made a new contract low on the break. Momentum studies are declining, but have fallen to oversold levels. The market’s short-term trend is negative as the close remains below the 9-day moving average. It is a slightly negative indicator that the close was under the swing pivot. The next downside target is now at 120.9525. The next area of resistance is around 121.9750 and 122.5325, while 1st support hits today at 121.1850 and below there at 120.9525.