Today’s quiet market conditions and news that the Greek government survived a confidence vote may behelping the Euro to post decent gains this morning, but it still has a long way to go to fully recover from the chartdamage sustained late last week. In addition, reports that as many as 6 ECB council members voted againstThursday’s surprise rate cut may be giving the Euro further strength this morning as it could indicate that furthernear-term easing measures may be difficult to come by. Low Euro zone inflation levels are not going awayanytime soon, however, and economic data from the region later this week is unlikely to generate anydramatically positive results. The December Euro may rise up towards the 134.15 area later this morning, butneeds additional positive Euro zone data to offset the negative impact of last week’s ECB rate cut.
The Commitments of Traders Futures and Options report as of November 5th for Euro showed Non-Commercialtraders were net long 39,988 contracts, a decrease of 28,169 contracts. The Commercial traders were net short37,966 contracts, a decrease of 24,202 contracts. The Nonreportable traders were net short 2,022 contracts, adecrease of 3,967 contracts. Non-Commercial and Nonreportable combined traders held a net long position of37,966 contracts. This represents a decrease of 24,202 contracts in the net long position held by these traders.
Technical Outlook
EUR (DEC): Momentum studies are still bearish but are now at oversold levels and will tend tosupport reversal action if it occurs. The market’s close below the 9-day moving average is an indication the shorttermtrend remains negative. The market’s close below the pivot swing number is a mildly negative setup. Thenext downside target is now at 132.4075. Some caution in pressing the downside is warranted with the RSI under30. The next area of resistance is around 134.3350 and 135.1075, while 1st support hits today at 132.9850 andbelow there at 132.4075.