Improving risk attitudes and a rare positive data point from France have provided little help to the Eurothis morning, as it has been scuttled once again by dovish ECB commentary. Given last week’s scare over thepotential for negative Euro zone deposit rates, statements from an ECB policy maker that their rate cut optionsare not fully exhausted has helped to put the Euro on the defensive again early this week. Euro zoneUnemployment and Inflation readings at the end of this week are already beginning to loom very large, as theEuro clearly needs to see consistent improvement from data outside of Germany in order to shift the ECB out ofan accommodative policy stance. The December Euro may find near-term support just below the 135.00 levellater this morning, but dovish talk out of the ECB in regards to rate cut expectations, should leave the Euro underpressure in the days ahead. The Commitments of Traders Futures and Options report as of November 19th forEuro showed Non-Commercial traders were net long 9,049 contracts, a decrease of 12,354 contracts. TheCommercial traders were net long 12,538 contracts, an increase of 11,396 contracts. The Non-reportable traderswere net short 21,587 contracts, a decrease of 957 contracts. Non-Commercial and Non-reportable combinedtraders held a net short position of 12,538 contracts. This represents an increase of 11,397 contracts in the netshort position held by these traders.
Technical Outlook
EUR (DEC): The cross over and close above the 60-day moving average is an indication the longertermtrend has turned positive. Stochastics are at mid-range but trending higher, which should reinforce a movehigher if resistance levels are taken out. The cross over and close above the 18-day moving average indicates theintermediate-term trend has turned up. The market setup is supportive for early gains with the close over the 1stswing resistance. The next upside objective is 136.1975. The next area of resistance is around 135.9450 and136.1975, while 1st support hits today at 135.0350 and below there at 134.3775.