The Euro wasn’t able to extend its upward track from last Friday straight away this morning and that hasto be discouraging to the bull camp. The bull camp might have been able to benefit from impressive GermanMachinery orders figures overnight, but that news was partially countervailed by concerns that the Frencheconomy might remain mired in recession. However, the Euro bulls should be cheered by the fact that the interestrate differential between the US and Euro zone might be set to hold steady, after the US numbers Friday providedsome caution to the US Fed. However, for the Euro to return to the 1.38 level could be extremely difficult, withoutproof that the US recovery is indeed faltering. Pushed into the market we would look to be short the Euro on arally up to an old gap at 1.3727 to 1.3742. The Commitments of Traders Futures and Options report as of January7th for Euro showed Non-Commercial traders were net long 14,370 contracts, a decrease of 12,820 contracts.The Commercial traders were net long 8,041 contracts, an increase of 20,859 contracts which represents achange from a net short to net long position. The Non-reportable traders were net short 22,411 contracts, anincrease of 8,039 contracts. Non-Commercial and Non-reportable combined traders held a net short position of8,041 contracts. These traders have gone from a net long to a net short position.
Technical Outlook: The market now above the 60-day moving average suggests the longer-term trend hasturned up. A bullish signal was given with an upside crossover of the daily stochastics. Daily stochastics areshowing positive momentum from oversold levels, which should reinforce a move higher if near term resistance istaken out. A positive signal for trend short-term was given on a close over the 9-bar moving average. With theclose over the 1st swing resistance number, the market is in a moderately positive position. The next upsidetarget is 137.6300. Consider buying pull-backs since daily studies are bullish. The next area of resistance isaround 137.2300 and 137.6300, while 1st support hits today at 136.0700 and below there at 135.3100.