Modest increases with German Consumer Sentiment and French Business Sentiment have helped theEuro rebound from a new weekly low, although prices are still struggling to hold their ground in positive territorythis morning. S&P’s downgrade of the EU from a “triple-A” debt rating status is casting a shadow over the market,as it reflects some skepticism that several nations in the region can avoid problems with their upcoming budgetnegotiations. The Euro still needs to see clear improvement from “hard” economic numbers to turn the marketaround but with few major data points in front of the Christmas holiday, it remains vulnerable to end-of-week longliquidation. The March Euro could see a retest of the 136.25 overnight lows later this morning, and needs to see apositive shift in global risk sentiment to decisively lift clear of this morning’s low heading into the weekend.
Technical Outlook: Momentum studies trending lower at mid-range could accelerate a price break ifsupport levels are broken. The close below the 18-day moving average is an indication the intermediate-termtrend has turned down. The market tilt is slightly negative with the close under the pivot. The next downside targetis now at 136.2175. The next area of resistance is around 136.8450 and 137.1175, while 1st support hits today at136.3950 and below there at 136.2175.