The September Euro is grinding out moderate gains this morning, but appears to be having much better success with sustaining this current move into new high ground. The Euro has been able to maintain upside momentum in spite of a soft reading on German imports this morning, as recent improvement in Euro zone and German economic data is helping to smooth over any “cracks” in the region’s growth prospects. The main source of Euro strength continues to be the lack of fresh risk anxiety from recent EU trouble-spots, which is playing a major role in keeping peripheral EU debt yields subdued this month. There may be some loss of momentum after this morning’s US data window, but the Euro should consolidate this week’s gains as long as long as peripheral EU problems stay on summer holiday. The September Euro should find decent near-term support around the 133.30 level later today, and is likely to maintain this current positive tone through the rest of this week’s trading.
Technical Outlook
EUR (SEP): Rising stochastics at overbought levels warrant some caution for bulls. The market’s close above the 9-day moving average suggests the short-term trend remains positive. It is a mildly bullish indicator that the market closed over the pivot swing number. The next upside target is 134.0474. The next area of resistance is around 133.8449 and 134.0474, while 1st support hits today at 133.0550 and below there at 132.4675.