The Euro temporarily benefited from the some what disappointing US Non-farm payroll results at the endof last week. One might also suggest that a positive Euro zone PPI reading is providing some support to the Eurowhich was probably technically oversold at the end of last week. However, the PPI readings were hardlysignificant at +0.1% but seeing news of a bailout of the troubled bank in Portugal might also be cause for sometechnical short covering in the Euro. In order for the Euro to mount anything more than a simple technical shortcovering move probably requires something positive from Russia on containing the situation in the Ukraine, moreweak data from the US and or positive economic readings from the Euro zone. The Commitments of TradersFutures and Options report as of July 29th for Euro showed Non-Commercial traders were net short 110,335contracts, an increase of 20,031 contracts. The Commercial traders were net long 157,216 contracts, an increaseof 25,117 contracts. The Non-reportable traders were net short 46,882 contracts, an increase of 5,087 contracts.Non-Commercial and Non-reportable combined traders held a net short position of 157,217 contracts. Thisrepresents an increase of 25,118 contracts in the net short position held by these traders. We doubt the Euro hasthe capacity to completely throw off a 3 month old down trend channel pattern.
Technical Outlook: A bullish signal was given with an upside crossover of the daily stochastics. Rising fromoversold levels, daily momentum studies would support higher prices, especially on a close above resistance. Theclose below the 9-day moving average is a negative short-term indicator for trend. The market’s close above the2nd swing resistance number is a bullish indication. The near-term upside objective is at 134.8624. The next areaof resistance is around 134.5850 and 134.8624, while 1st support hits today at 133.9150 and below there at133.5225.