Although holding its ground in positive territory, the Euro has fallen back from its overnight highs as lastweek’s upside breakout may finally be running out of steam. While there were some modestly positive surprisesout of this morning’s Italian data, a lukewarm French Industrial Output reading has underscored the “gap”between German economic numbers and the rest of the EU. A speech by ECB President Draghi in Rome thismorning avoided slipping back into the dovish stance seen at the November ECB meeting, but a lack of progressby Euro zone finance ministers with developing a framework for dealing with bank failures in the region mayprovide a fresh source of headwinds later this morning. The December Euro should find near-term support aroundthe 137.25 level but with more than 1.50 cents in gains during the past 4 sessions, the Euro can ill afford to seefresh EU risk concerns rattle global markets and derail this current uptrend.
Technical Outlook: Momentum studies are trending higher but have entered overbought levels. The closeabove the 9-day moving average is a positive short-term indicator for trend. The close over the pivot swing is asomewhat positive setup. The near-term upside objective is at 137.8150. With a reading over 70, the 9-day RSI isapproaching overbought levels. The next area of resistance is around 137.6400 and 137.8150, while 1st supporthits today at 137.1200 and below there at 136.7750.