After an initial attempt to rally, the Euro is moving toward a more significant failure on its charts. With Eurozone March PMI and Services PMI results both coming in a touch below estimates, the path of least resistance ispointing downward. In fact, given the overbought condition of the Euro and a negative shift in the Dollar/Eurointerest rate differential argument, the fundamental setup for the Euro looks to favor the bear camp this week.Initial support is seen down at 1.3747 but a bigger retracement of the Jan/Mar rally targets a slide to 1.3724. TheCommitments of Traders Futures and Options report as of March 18th for Euro showed Non-Commercial traderswere net long 51,840 contracts, an increase of 17,095 contracts. The Commercial traders were net short 33,553contracts, an increase of 16,132 contracts. The Non-reportable traders were net short 18,287 contracts, anincrease of 962 contracts. Non-Commercial and Non-reportable combined traders held a net long position of33,553 contracts. This represents an increase of 16,133 contracts in the net long position held by these traders.
Technical Outlook: Momentum studies trending lower at mid-range should accelerate a move lower ifsupport levels are taken out. The market’s short-term trend is negative as the close remains below the 9-daymoving average. The close over the pivot swing is a somewhat positive setup. The next downside objective isnow at 137.4375. The next area of resistance is around 138.1349 and 138.3374, while 1st support hits today at137.6850 and below there at 137.4375.