The December Euro is finding moderate pressure this morning, although prices are generally holding their ground near the middle of their post-FOMC consolidation range. While ECB President Draghi’s dovish comments are still casting a shadow over the market, a modest improvement with global risk sentiment has helped the Euro find a near-term floor well above this week’s early lows. Italian tensions are injecting a note of caution to the market early today with President Napolitano’s comment of a “disturbing” political issue, but as long as the region’s problems don not create fresh news headlines, the Euro should be able to avoid any downside breakout. The December Euro may slide down towards the 134.72 level later this morning, and is likely to avoid any severe pressure as long as the market’s focus stays on other regions of the globe.
Technical Outlook
EUR (DEC): Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. The market’s close above the 9-day moving average suggests the short-term trend remains positive. The outside day up is somewhat positive. Market positioning is positive with the close over the 1st swing resistance. The next upside objective is 135.9150. The market is approaching overbought levels with an RSI over 70. The next area of resistance is around 135.6700 and 135.9150, while 1st support hits today at 134.9100 and below there at 134.3950.