Undermining the Euro this morning is somewhat slack German ZEW January expectation readings. TheEuro is also seemingly indirectly under residual pressure from wide held expectations for the Fed to continue itsslow tapering effort in next week’s meeting. Cushioning the Euro against its data flow overnight is the fact thatEuropean equities clawed out fresh 5 1/2 year highs. Pushed into the market we have to favor the downside asthe Dollar is winning by default and the major gun of the Euro, the German economy saw data that discouragessome would be buyers. Near term downside potential in the March Euro is seen down at 1.35 but a lower supportlevel might also be seen at 1.3466. The Commitments of Traders Futures and Options report as of January 14thfor Euro showed Non-Commercial traders were net long 7,253 contracts, a decrease of 7,117 contracts. TheCommercial traders were net long 13,127 contracts, an increase of 5,086 contracts. The Non-reportable traderswere net short 20,381 contracts, a decrease of 2,030 contracts. Non-Commercial and Non-reportable combinedtraders held a net short position of 13,128 contracts. This represents an increase of 5,087 contracts in the netshort position held by these traders.
Technical Outlook: Momentum studies are declining, but have fallen to oversold levels. A negative signalfor trend short-term was given on a close under the 9-bar moving average. The defensive setup, with the closeunder the 2nd swing support, could cause some early weakness. The next downside objective is 134.4525. Thenext area of resistance is around 135.8550 and 136.5525, while 1st support hits today at 134.8050 and belowthere at 134.4525.