Now that market focus is shifting back across the Atlantic, the Euro is having a difficult time putting thebrakes on this week’s pullback. Lukewarm German Sentiment and Retail Sales numbers along with an up tick inItalian Unemployment was an early source of pressure for the Euro, and were compounded by sluggish Eurozone inflation and a new record high for Euro zone Unemployment later in the morning. Slow and steady growththroughout the EU had been a major component for the Euro’s longer-term uptrend during the past few months,so the market clearly needs to see fresh positive data points from the region in order for the Euro to regain asizable portion of recent losses. The December Euro is approaching critical support around the 136.50 area, andneeds to find positive news at home in order to put the brakes on this sell off. The Commitments of TradersFutures and Options report as of October 15th for Euro showed Non-Commercial traders were net long 60,564contracts, a decrease of 8,766 contracts. The Commercial traders were net short 52,901 contracts, a decrease of11,169 contracts. The Non reportable traders were net short 7,664 contracts, an increase of 2,405 contracts. Non-Commercial and Non reportable combined traders held a net long position of 52,900 contracts. This represents adecrease of 11,171 contracts in the net long position held by these traders.
Technical Outlook
EUR (DEC): Momentum studies are trending lower from high levels which should accelerate a movelower on a break below the 1st swing support. The close below the 9-day moving average is a negative short-termindicator for trend. It is a slightly negative indicator that the close was lower than the pivot swing number. The nextdownside target is now at 136.5050. The next area of resistance is around 137.8399 and 138.3049, while 1stsupport hits today at 136.9400 and below there at 136.5050.