In spite of some recent sluggish economic data from the region, the Euro has been able to follow up onlast Friday’s recovery with moderate gains and an early move back above the key 135.00 level. Comments by anECB official that “the worst is behind us” has provided more than enough support for the Euro in today’s quietmarketplace, particularly with the Euro zone Trade surplus figure coming in above expectations. Weak inflationwill not go away soon, however, so the Euro may have to rely on improving global risk sentiment in order tomaintain today’s early strength. The December Euro could climb up towards the 135.28 level later in the session,but needs to receive additional positive news from upcoming Euro zone economic data in order to extend thiscurrent rally up to a new monthly high.
The Commitments of Traders Futures and Options report as of November 12th for Euro showed Non-Commercialtraders were net long 21,403 contracts, a decrease of 18,585 contracts. The Commercial traders were net long1,142 contracts, an increase of 39,108 contracts which represents a change from a net short to net long position.The Nonreportable traders were net short 22,544 contracts, an increase of 20,522 contracts. Non-Commercialand Nonreportable combined traders held a net short position of 1,141 contracts. These traders have gone from anet long to a net short position.
Technical Outlook
EUR (DEC): The major trend could be turning up with the close back above the 60-day movingaverage. Daily stochastics are showing positive momentum from oversold levels, which should reinforce a movehigher if near term resistance is taken out. The close above the 9-day moving average is a positive short-termindicator for trend. It is a mildly bullish indicator that the market closed over the pivot swing number. The neartermupside target is at 135.5725. The next area of resistance is around 135.3250 and 135.5725, while 1stsupport hits today at 134.5750 and below there at 134.0725.