While consolidating this week’s rebound and finding near-term support at the key 135.00 level, the Euro has been reluctant to probe the upside in front of today’s European Central Bank meeting. Reports that the ECBwould hold off on fresh easing measures at today’s meeting may not come as too much of a surprise to themarket given the improvement seen with many Euro zone data results, the lack of peripheral EU risk concernsand the Euro’s sharp slide from the late October highs. However, the sharp drop in Euro zone inflation has raisedexpectations that ECB President Draghi will be fairly dovish with his post meeting comments, with fears that hewill telegraph a December ECB easing move potentially derailing this week’s recovery in a hurry. A break below135.00 would also put the December Euro back below its 50-day moving average, but decent support should befound around the 134.82 area in front of tomorrow’s US Payroll numbers. The Commitments of Traders Futuresand Options report as of October 29th for Euro showed Non-Commercial traders were net long 68,157 contracts,an increase of 4,614 contracts. The Commercial traders were net short 62,168 contracts, an increase of 5,565contracts. The Non-reportable traders were net short 5,989 contracts, a decrease of 951 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 62,168 contracts. This representsan increase of 5,565 contracts in the net long position held by these traders.
Technical Outlook
EUR (DEC): A negative indicator was given with the downside crossover of the 9 and 18 bar movingaverage. Daily stochastics are trending lower but have declined into oversold territory. The close below the 9-daymoving average is a negative short-term indicator for trend. A positive setup occurred with the close over the 1stswing resistance. The next downside objective is now at 134.3450. The next area of resistance is around135.6000 and 135.9450, while 1st support hits today at 134.8000 and below there at 134.3450.