The December Euro was able to shake off early pressure and climb back above the key 135.00 level this morning, but for the moment is showing little inclination to retest last week’s high for the move. A jump in Euro zone Economic Sentiment helped to lift prices back to the upside, although mixed results from other sentiment measures have blunted its support for the Euro this morning. Comments by ECB President Draghi earlier this week continue to weigh on the Euro, particularly with an ECB policy meeting next week. Unless there is a vast improvement with global risk appetites late this week, the Euro may head back towards the recent lows later this morning. The December Euro should find support around the 134.84 level, and should be able to avoid a downside breakout as long as Italian political problems do not flare up once again.
Technical Outlook
EUR (DEC): Rising stochastics at overbought levels warrant some caution for bulls. A positive signal for trend short-term was given on a close over the 9-bar moving average. The swing indicator gave a moderately negative reading with the close below the 1st support number. The near-term upside target is at 135.4925. The next area of resistance is around 135.1450 and 135.4925, while 1st support hits today at 134.5950 and below there at 134.3925.