All things considered, the euro has held together rather impressively over the last several trading sessions as it has managed a sideways consolidation in the face of distinct global deflation fears. Critical support is seen down at 1.1769 and we don’t expect that level to hold once the US economic report flow resumes. Cushioning the Euro is news that the ECB QE effort is well underway and that Germany managed to balance its budget a year ahead of expectations. Another issue that might be lending some support to the Euro, was news that Italy saw its November industry output tick upward. We don’t think the slide in the Euro has run its course and forced into the market, we would be a seller of a rally to 1.1878.
Technical Outlook: Daily momentum studies are on the rise from low levels and should accelerate a move higher on a push through the 1st swing resistance. The market’s close below the 9-day moving average is an indication the short-term trend remains negative. The daily closing price reversal down is a negative indicator for prices. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The nearterm upside target is at 119.2350. Some caution in pressing the downside is warranted with the RSI under 30. The next area of resistance is around 118.8300 and 119.2350, while 1st support hits today at 117.9700 and below there at 117.5150.