A quiet weekend has helped the Euro consolidate recent gains, but has also put some near-term brakeson its recent rally as well. Although recent Euro zone and German economic numbers have not been decisivelystrong by any measure, they have pointed towards slow and steady growth for the region while avoiding the typeof market-shaking data “misses” that could have derailed this recent uptrend. As long as EU trouble-spots remainoff the market’s radar for now, the Euro should hold its ground in close proximity to the recent highs but it mayrequire sluggish US data this morning for the market to extend this current rally up into new high ground. TheDecember Euro may find near-term support around the 137.96 level later this morning, and looks to have furtherupside left to go before this current uptrend runs out of steam. The Commitments of Traders Futures and Optionsreport as of October 1st for Euro showed Non-Commercial traders were net long 67,747 contracts, an increase of1,388 contracts. The Commercial traders were net short 62,294 contracts, a decrease of 1,470 contracts. TheNon-reportable traders were net short 5,453 contracts, an increase of 2,858 contracts. Non-Commercial and Nonreportablecombined traders held a net long position of 62,294 contracts. This represents a decrease of 1,470contracts in the net long position held by these traders.
Technical Outlook
EUR (DEC): The market made a new contract high on the rally. Momentum studies are trendinghigher but have entered overbought levels. A positive signal for trend short-term was given on a close over the 9-bar moving average. The market has a slightly positive tilt with the close over the swing pivot. The near-termupside objective is at 138.6300. With a reading over 70, the 9-day RSI is approaching overbought levels. The nextarea of resistance is around 138.3400 and 138.6300, while 1st support hits today at 137.7600 and below there at137.4700.