The Euro has started out weaker today in the face of a decline in German December Industrial outputfigures and also because of initial strength in the Dollar. Pushed into the market today we have to favor the bullcase in the Euro but it is very difficult to throw off the entrenched down trend pattern in the March Euro from thelate December highs! In short, traders should look for a rally to sell in the Euro, perhaps up at a past critical pivotzone of 1.3665. On a moderate rise in the Euro this morning, traders might consider the purchase of a March1.3550/1.33 bear put spread for 55 ticks.
Technical Outlook: The crossover up in the daily stochastics is a bullish signal. Momentum studies aretrending higher from mid-range, which should support a move higher if resistance levels are penetrated. Apositive signal for trend short-term was given on a close over the 9-bar moving average. The outside day up issomewhat positive. The market has a bullish tilt coming into today’s trade with the close above the 2nd swingresistance. The near-term upside target is at 137.0975. The next area of resistance is around 136.6050 and137.0975, while 1st support hits today at 135.2150 and below there at 134.3175.