As suggested already, the Euro has seen a mixed bag of economic news flow overnight, with supportiveGerman employment news offset by a contraction in Euro zone PPI figures. In the short term, macro economicvibes toward the Euro zone favor the bear camp, with the Euro only avoiding more downside because of mixedUS data flows. While the German economy continues to show strength, a negative PPI result from the Euro zoneleaves the fear of slowing outside of Germany in place. With a US official visit to Germany it is also possible thatdialogue in the Press will favor the bear camp in the Euro. A failure to hold above 1.3600 could also give the bearcamp an additional technical edge today. A long term up trend channel support line in the March Euro is seendown at 1.3541 today and that trend line support rises to 1.3595 by this coming Friday. Pushed into the Euro wewould prefer to be short on minor rallies. The Commitments of Traders Futures and Options report as ofDecember 31st for Euro showed Non-Commercial traders were net long 27,190 contracts, a decrease of 3,948contracts. The Commercial traders were net short 12,818 contracts, a decrease of 3,163 contracts. The Nonreportabletraders were net short 14,372 contracts, a decrease of 786 contracts. Non-Commercial and Nonreportablecombined traders held a net long position of 12,818 contracts. This represents a decrease of 3,162contracts in the net long position held by these traders.
Technical Outlook: The cross over and close above the 60-day moving average is an indication thelonger-term trend has turned positive. Momentum studies are declining, but have fallen to oversold levels. Themarket’s short-term trend is negative as the close remains below the 9-day moving average. The upside closingprice reversal on the daily chart is somewhat bullish. The close over the pivot swing is a somewhat positive setup.The next downside objective is 135.4000. The next area of resistance is around 136.7300 and 137.0400, while1st support hits today at 135.9100 and below there at 135.4000.