Another new high in the Euro overnight suggests that the trade is embracing the argument that the Euroeconomy is stronger than the US economy. With another new high in the Euro, one might also suggest that thetrade is embracing the belief that the interest rate differential between the US and the Euro zone is poised toextend in favor of the Euro. In short, one might suggest that the Euro enters the US payroll window priced forperfection. However, it is entirely possible that the Euro will see an additional temporary upside extension in theevent that the US non farm payroll report comes in below +110,000. In fact, overnight news flow from the Eurozone should add to the upward track in the Euro, with talk of rising inflation and breakneck German manufacturingactivity. Upside targeting capacity later this morning is seen up at 1.3930.
Technical Outlook: The daily stochastics have crossed over up which is a bullish indication. Studies areshowing positive momentum but are now in overbought territory, so some caution is warranted. A positive signalfor trend short-term was given on a close over the 9-bar moving average. There could be more upside followthrough since the market closed above the 2nd swing resistance. The next upside target is 139.8850. The nextarea of resistance is around 139.4199 and 139.8850, while 1st support hits today at 137.8000 and below there at136.6450.