Positive developments in the region and a modest “risk on” vibe in global markets has helped the Eurohold its ground well above last Friday’s lows, but the market may be looking for a fresh catalyst in order for pricesto climb above this week’s trading range. A sharp jump in French consumer spending and a modest increase inDutch GDP provided some measure of support, but lackluster pre-holiday markets are making it difficult for theEuro to fully regain upside momentum. While positive US data this morning may cause further headwinds, theEuro looks to have put in a near-term low with last Friday’s reversal. The March Euro may find support around the136.60 level, and should avoid any retest of last week’s lows heading into the holiday.
Technical Outlook: Momentum studies trending lower at mid-range should accelerate a move lower ifsupport levels are taken out. The cross over and close above the 18-day moving average is an indication theintermediate-term trend has turned positive. The close over the pivot swing is a somewhat positive setup. Thenext downside target is 136.4850. The next area of resistance is around 137.1900 and 137.4050, while 1stsupport hits today at 136.7300 and below there at 136.4850.