A lower low for the move leaves the recent down trend pattern in place, especially with disappointing German Industrial output results floated overnight. German Industrial output posted the biggest monthly drop in 2years in May and that combined with the better than expected US payrolls leaves the Euro in a macro-economic differential slide to start the new trading week. Initial downside targeting is seen at some old consolidation lows of1.3577 and perhaps not until the 1.3567 level. In order to turn the tide around in the Euro might require a riseback above the 1.3617 level. The Commitments of Traders Futures and Options report as of July 1st for Euroshowed Non-Commercial traders were net short 61,860 contracts, an increase of 3,241 contracts. TheCommercial traders were net long 97,436 contracts, an increase of 2,610 contracts. The Non-reportable traderswere net short 35,576 contracts, a decrease of 632 contracts. Non-Commercial and Non-reportable combinedtraders held a net short position of 97,436 contracts. This represents an increase of 2,609 contracts in the netshort position held by these traders.
Technical Outlook: The close under the 40-day moving average indicates the longer-term trend could beturning down. The daily stochastics have crossed over down which is a bearish indication. Momentum studies aretrending lower from high levels which should accelerate a move lower on a break below the 1st swing support.The close below the 9-day moving average is a negative short-term indicator for trend. The defensive setup, withthe close under the 2nd swing support, could cause some early weakness. The next downside target is now at135.5325. The next area of resistance is around 136.4549 and 136.9125, while 1st support hits today at 135.7650and below there at 135.5325.