The September Euro remains under moderate pressure this morning after making a sharp downside turn over the past few hours. Risk aversion appears to have derailed the Euro, not only from events in Syria but from a smoldering situation with the Italian government. Today’s German IFO survey came in above expectations and showed continued growth at the core of the EU, and with a fairly well received Spanish short-term debt auction have helped to put some brakes on this morning’s downdraft. Even if this morning’s US data fails to meet market expectations again, the combination of thin markets and a “risk off” mood will make it difficult for the Euro to fully recover this morning’s losses over the balance of today’s trading. The September Euro may retest the overnight low of 133.23 later in the session, and will need a significant improvement with global risk sentiment in order to regain last week’s upside momentum.
Technical Outlook
EUR (SEP): Momentum studies are trending higher but have entered overbought levels. A positive signal for trend short-term was given on a close over the 9-bar moving average. It is a slightly negative indicator that the close was lower than the pivot swing number. The next upside objective is 134.1250. The next area of resistance is around 133.9100 and 134.1250, while 1st support hits today at 133.5300 and below there at 133.3650.