The September Euro continued on its downward slide from last week’s stark turnaround. What little economic data was reported Monday did have a positive economic tone for all of Europe; however, overhanging negative sentiment for Europe’s debt problems continues to plague the currency. This is now the fifth day down in a row increasing the chances of a potential Euro bounce as recent action has set up a minor oversold situation. If today’s economic news out of the US comes in decidedly negative, we could see that bounce. Otherwise the Euro will drift lower potentially making new lows for the session just after the US economic data. The Commitments of Traders Futures and Options report as of August 27th for Euro showed Non-Commercial traders were net long 41,514 contracts, an increase of 4,406 contracts. The Commercial traders were net short 34,595 contracts, an increase of 5,957 contracts. The Non-reportable traders were net short 6,920 contracts, a decrease of 1,549 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 34,594 contracts. This represents an increase of 5,955 contracts in the net long position held by these traders.
Technical Outlook
EUR (SEP): The major trend has turned down with the cross over back below the 40-day moving average. Momentum studies are still bearish but are now at oversold levels and will tend to support reversal action if it occurs. The close below the 9-day moving average is a negative short-term indicator for trend. It is a slightly negative indicator that the close was lower than the pivot swing number. The next downside objective is now at 131.3325. The next area of resistance is around 132.5950 and 132.9925, while 1st support hits today at 131.7650 and below there at 131.3325.