With a modest show of positive data overnight, the Euro appears to have found some measure offundamental support on its charts. In fact, with the Euro zone posting the lowest government deficit reading sincethe debt crisis and Euro zone manufacturing activity showing some improvement, one could suggest that the Eurohas a number of fundamental positives that are capable of checking up the slide in the Euro. With the COT reportshowing a net spec short in the Euro and the Euro trading another 200 points lower in the aftermath of the COTmark off date, one could suggest that the Euro is at least modestly oversold. However, the main driving force ofthe direction in the Euro is likely to rest on the flow of US economic data, especially with a potentially critical nonfarm payroll result due out at the end of the week. The Commitments of Traders Futures and Options report as ofJanuary 28th for Euro showed Non-Commercial traders were net long 11,750 contracts, an increase of 16,183contracts which represents a change from a net short to net long position. The Commercial traders were net long13,228 contracts, a decrease of 23,541 contracts. The Non-reportable traders were net short 24,978 contracts, adecrease of 7,358 contracts. Non-Commercial and Non-reportable combined traders held a net short position of13,228 contracts. This represents a decrease of 23,541 contracts in the net short position held by these traders.
Technical Outlook: Declining momentum studies in the neutral zone will tend to reinforce lower priceaction. The close below the 9-day moving average is a negative short-term indicator for trend. The market’s closebelow the 1st swing support number suggests a moderately negative setup for today. The next downsideobjective is 134.1175. The next area of resistance is around 135.3450 and 136.0175, while 1st support hits todayat 134.3950 and below there at 134.1175.