Reuters called the German growth figures overnight a thunderbolt result and that highlights the magnitude of the better than expected economic readings. However, given the weight and duration of the wet towel hanging over the Euro zone from the twin problems of Ukraine & Greece, one should not underestimate the magnitude of the technical short covering gains ahead in the Euro. Clearly the Greek deal has to be inked quickly and the trade has to start giving credence to news that Spain has posted seven straight periods of growth, for the Euro to settle into an uptrend. In the meantime, traders should view returns to consolidation support of 1.1283 as a long term buying opportunity.
Technical Outlook: The moving average crossover up (9 above 18) indicates a possible developing shortterm uptrend. Stochastics are at mid-range but trending higher, which should reinforce a move higher if resistance levels are taken out. The cross over and close above the 18-day moving average is an indication the intermediate-term trend has turned positive. The market has a bullish tilt coming into today’s trade with the close above the 2nd swing resistance. The next upside target is 115.0800. The next area of resistance is around 114.6900 and 115.0800, while 1st support hits today at 113.4900 and below there at 112.6800.