The slack data from the US last week and the lack of significant developments from the Ukraine has allowed the Euro to return to the top of the August consolidation zone. Initial resistance is seen at 1.3417 and thecurrency seems to be garnering some lift from a bigger than expected Euro zone trade surplus release. Limitingthe upside tilt in the Euro is fresh talk of sluggish wage gains in Germany. Given the state of flux in the Ukraineand signs of Ukraine national army gains against the rebels, the trade must be on the look-out for a sharpRussian escalation of assistance or the rebels might be overwhelmed. We think the risk of being long the Euro istoo high for the risks facing the bull camp. The Commitments of Traders Futures and Options report as of August12th for Euro showed Non-Commercial traders were net short 131,135 contracts, a decrease of 1,892 contracts.The Commercial traders were net long 181,733 contracts, a decrease of 1,045 contracts. The Non-reportabletraders were net short 50,598 contracts, an increase of 848 contracts. Non-Commercial and Non-reportablecombined traders held a net short position of 181,733 contracts. This represents a decrease of 1,044 contracts inthe net short position held by these traders. The Non-reportable Net Short position in the Euro hit a new recordlevel at 50,598 contracts.
Technical Outlook: Momentum studies are rising from mid-range, which could accelerate a move higher ifresistance levels are penetrated. The market’s short-term trend is positive on the close above the 9-day movingaverage. With the close over the 1st swing resistance number, the market is in a moderately positive position. Thenear-term upside objective is at 134.4650. The next area of resistance is around 134.2500 and 134.4650, while1st support hits today at 133.7100 and below there at 133.3850.