Positive German sentiment data has helped the Euro build upon Thursday’s reversal, although it is onlymoderately higher for a week that has seen some chaotic and turbulent trading. Today’s stronger than expectedreadings for the German Ifo Business Climate and Expectations surveys have clearly given the Euro a boost thismorning, but once again underscore the gap between German economic strength and the rest of the EU. ECBPresident Draghi may have squelched market hopes for negative deposit rates with his comments, but thismonth’s rate cut should make it clear that they will remain in an accommodative stance going forward. TheDecember Euro could extend today’s upmove towards the 135.40 area, but needs to see much moreimprovement with non-German economic data in order to climb towards new monthly highs.
Technical Outlook
EUR (DEC): Momentum studies are rising from mid-range, which could accelerate a move higher ifresistance levels are penetrated. The market’s short-term trend is positive on the close above the 9-day movingaverage. The upside closing price reversal on the daily chart is somewhat bullish. The market has a slightlypositive tilt with the close over the swing pivot. The near-term upside target is at 135.5100. The next area ofresistance is around 135.2600 and 135.5100, while 1st support hits today at 134.3800 and below there at133.7500.