The September Euro remains well into negative territory in spite of this morning’s positive economic data from the region. Both the Euro zone and German “flash” PMI readings were above market forecasts and were above the key 50.0 level, which will reinforce ideas that the overall EU is slowly but steadily coming out of a protracted recession. While sluggish “flash” PMI readings from France may give the market some pause for thought, it may be the increasingly negative vibes coming from Greece that are keeping the Euro on the defensive this morning. As long as peripheral EU debt problems stay out of market news headlines, the Euro should hold its ground above last week’s low – but another upside leg will have to wait until near-term Dollar strength runs out of steam. The September Euro should find decent support around the 132.85 level later this morning, and will need to find stronger global risk sentiment in order to climb back towards this week’s highs
Technical Outlook
EUR (SEP): Momentum studies are trending higher but have entered overbought levels. The market’s close above the 9-day moving average suggests the short-term trend remains positive. It is a slightly negative indicator that the close was under the swing pivot. The next upside objective is 134.6224. The next area of resistance is around 134.0249 and 134.6224, while 1st support hits today at 133.0950 and below there at 132.7625.