The daily chart shows that the euro has caught a bid. It has broken out of the downward sloping channel and moved through the 10 day EMA. Money is flowing into the market and momentum has turned up (although the MACD is still negative). The next logical trading target is the low established in early October.
On the weekly chart, the 10 week EMA and the 61.8% Fib level are more or less at the same point, so they provide a good target as well.
So -- why is this happening? Last month, the ECB created a large lending facility that added a ton of liquidity to the banking system. As such, the fear of wide-spread bank defaults is decreasing, leading to investor confidence in the region.
The WSJ has more on the lending program here.
