Improving risk appetites have also been a benefit to the Euro this morning, although there is still somecaution with taking prices back towards this week’s early highs, much less the highs for the move posted earlierthis month. ECB President Draghi may have made some downbeat comments on the economic state of the Eurozone, but stayed well clear of any dovish remarks that could have scuttled the Euro’s modest recovery over thepast few sessions. Italy was able to see a large drop in yields at their Treasury auctions this week, in spite of theirrecent political upheaval, which has emphasized how much peripheral EU problems have moved to a backburnerissue with the market. The December Euro may climb up towards the 135.94 level later in today’s session, butmay need to see positive vibes coming from Washington throughout the day in order to maintain this early upsidemomentum.
Technical Outlook
EUR (DEC): Momentum studies trending lower at mid-range should accelerate a move lower ifsupport levels are taken out. The close under the 18-day moving average indicates the intermediate-term trendcould be turning down. The market tilt is slightly negative with the close under the pivot. The next downside targetis 134.6200. The next area of resistance is around 135.5800 and 135.8600, while 1st support hits today at134.9600 and below there at 134.6200.