The September Euro was able to shake off early pressure and post moderate gains this morning, as positive comments from the Bundesbank helped to lift prices back towards last Friday’s highs. A surge in German yields is helping to support the Euro early this week, as slow but steady Euro zone growth has replaced peripheral EU trouble spots with more positive news headlines. A retest of the early August highs may depend on this weeks “flash” PMI numbers continuing to show forward progress but for now, improving sentiment should keep the Euro from falling well below these current levels. Quiet trading conditions will continue to benefit the Euro, which is likely to remain fairly well supported through the early part of this week. The September Euro may find resistance around the 133.82 area, but will likely need to get past the “flash” PMI numbers later this week to have any chance of reaching up to a new monthly high. The Commitments of Traders Futures and Options report as of August 13th for Euro showed Non-Commercial traders were net long 15,299 contracts, an increase of 13,323 contracts. The Commercial traders were net long 945 contracts, a decrease of 11,959 contracts. The Nonreportable traders were net short 16,244 contracts, an increase of 1,364 contracts. Non-Commercial and Nonreportable combined traders held a net short position of 945 contracts. This represents a decrease of 11,959 contracts in the net short position held by these traders.
Technical Outlook
EUR (SEP): Stochastics trending lower at midrange will tend to reinforce a move lower especially if support levels are taken out. The market’s short-term trend is positive on the close above the 9-day moving average. The downside closing price reversal on the daily chart is somewhat negative. The close over the pivot swing is a somewhat positive setup. The next downside target is 132.7150. The next area of resistance is around 133.7100 and 134.1150, while 1st support hits today at 133.0100 and below there at 132.7150.