The December Euro continues to follow-through to the upside this morning, and has been one of the major beneficiaries of the Fed’s tapering inaction yesterday afternoon. While recent “hard” Euro zone data has showed mixed results, improving sentiment from the region has combined with resurgent global risk attitudes to lift the Euro further into new high ground during overnight trading. While this weekend’s German election is among several problematic issues for the Euro to contend with over the near future, lower peripheral EU debt yields in the wake of the FOMC meeting will provide a source of underlying support during today’s trading. The December Euro may climb up towards the 135.90 area later this morning, but will have trouble filling in the chart-gap beyond that level until the German election results are known to the market early next week.
Technical Outlook
EUR (SEP): A positive indicator was given with the upside crossover of the 9 and 18 bar moving average. Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. The close above the 9-day moving average is a positive short-term indicator for trend. The market’s close above the 2nd swing resistance number is a bullish indication. The near-term upside target is at 136.6474. The market is approaching overbought levels with an RSI over 70. The next area of resistance is around 136.1749 and 136.6474, while 1st support hits today at 134.3250 and below there at 132.9475.