With a quasi-gap lower trade seen overnight it is clear that the promise of easing from the head of theECB last week has left the Euro under pressure. Adding into the downward tilt is a soft German business moralerelease overnight and renewed geopolitical tensions along the Russian/Ukraine border. In short, reneweddeflation threats have returned to a front and center status again in the Euro zone and it would not seem like theECB is going to act until the Euro falls back to the lowest levels seen since July of last year. The Commitments ofTraders Futures and Options report as of August 19th for Euro showed Non-Commercial traders were net short142,758 contracts, an increase of 11,623 contracts. The Commercial traders were net long 194,595 contracts, anincrease of 12,862 contracts. The Non-reportable traders were net short 51,836 contracts, an increase of 1,238contracts. Non-Commercial and Non-reportable combined traders held a net short position of 194,594 contracts.This represents an increase of 12,861 contracts in the net short position held by these traders. It should be notedthat the Non-reportable Net Short position in the Euro hit a new record level at 51,836 contracts in the latestweekly report.
Technical Outlook: Daily stochastics are trending lower but have declined into oversold territory. The market’s short-term trend is negative as the close remains below the 9-day moving average. The daily closingprice reversal down puts the market on the defensive. The swing indicator gave a moderately negative readingwith the close below the 1st support number. The next downside objective is 131.7700. The 9-day RSI under 30indicates the market is approaching oversold levels. The next area of resistance is around 132.8399 and133.2900, while 1st support hits today at 132.0800 and below there at 131.7700.