Given the potential headwinds from this morning’s Euro zone economic data, the Euro is holding up fairlywell by showing moderate losses early this morning. Italian and French inflation readings were generally in-linebut remain well below the 1% year-on-year level, while a surprisingly sluggish Euro zone Industrial Productionnumber has provided further evidence of recent weakness in the region’s “hard” data points. The market appearsto have come to terms with “on hold” Euro zone monetary stance over the near-term, as recent dovish commentsfrom ECB President Draghi and other key officials have done little to derail the Euro’s upsurge. The March Euroshould find decent support around the 137.50 area, and as long as it can avoid any fresh risk events from theregion it should be able to maintain this current uptrend.
Technical Outlook: Studies are showing positive momentum but are now in overbought territory, so somecaution is warranted. The market’s close above the 9-day moving average suggests the short-term trend remainspositive. The close over the pivot swing is a somewhat positive setup. The next upside target is 138.5200. Themarket is becoming somewhat overbought now that the RSI is over 70. The next area of resistance is around138.2300 and 138.5200, while 1st support hits today at 137.5300 and below there at 137.1200.