The September Euro has been able to bounce back from moderate pressure this morning, but may need to see stronger global risk sentiment in order to make further headway into positive territory later today. A decent increase in the German ZEW survey has more than offset a slight miss on Euro zone Industrial Output and in-line German inflation data to keep the region’s “green shoots” recovery moving forward. Until there are consistently stronger data readings from outside Germany, however, the peripheral EU will need to remain relatively quiet news-wise in order for the Euro to remain well supported. While stronger US data may push the Euro well below the 133.00 level, a retest of yesterday’s weekly low may be difficult unless Euro zone risk concerns start to smolder again. The September Euro should find near-term support around the 132.86 level, and will continue to benefit from market attention being focused on other regions of the globe.
Technical Outlook
EUR (SEP): Stochastics turning bearish at overbought levels will tend to support lower prices if support levels are broken. A positive signal for trend short-term was given on a close over the 9-bar moving average. The market’s close below the 1st swing support number suggests a moderately negative setup for today. The next downside target is 132.4175. The next area of resistance is around 133.3850 and 133.7575, while 1st support hits today at 132.7150 and below there at 132.4175.