The December Euro was unable to hold onto early gains this morning, but has held within the recent consolidation price range after this weekend’s “mixed” results. While yesterday’s German elections saw Angela Merkel’s CDU/CSU alliance receive the largest share of votes by a fairly wide margin, they were unable to gain a “working” majority and may face tense negotiations with opposition parties in order to form a “grand coalition”. Euro zone, German and French “flash” manufacturing PMI numbers all came in below forecasts, which offset any benefit from decent results from the Services and Composite measures. With this week’s Greek debt negotiations casting a shadow over the market, the Euro may need to find stronger global risk sentiment to hold onto these current price levels. The December Euro may slide down to the 134.88 level later today, and may find further pressure if Euro zone debt anxiety starts to show early signs of flaring up once again. The Commitments of Traders Futures and Options report as of September 17th for Euro showed Non-Commercial traders were net long 33,283 contracts, an increase of 19,217 contracts. The Commercial traders were net short 19,690 contracts, an increase of 19,911 contracts which represents a change from a net long to net short position. The Nonreportable traders were net short 13,592 contracts, a decrease of 696 contracts. Non-Commercial and Nonreportable combined traders held a net long position of 19,691 contracts. These traders have gone from a net short to a net long position.
Technical Outlook
EUR (SEP): Momentum studies are trending higher but have entered overbought levels. The market’s short-term trend is positive on the close above the 9-day moving average. The market tilt is slightly negative with the close under the pivot. The next upside target is 135.7775. With a reading over 70, the 9-day RSI is approaching overbought levels. The next area of resistance is around 135.5250 and 135.7775, while 1st support hits today at 135.0150 and below there at 134.7575.