The trade thinks the ECB is poised to increase QE action ahead and it is also possible that lower oil prices and word of a Russian troop pullback in the Ukraine has given rise to some fresh short covering buying inthe Euro this morning. In fact, with the Non-reportable Net Short position in the Euro hitting a new record level at55,901 contracts last week, the prospect of more short covering is pretty high. However, talk of more coordinatedstimulus among EU members from meetings late last week, probably serves to thicken overhead resistance in theEuro up at 1.2722. The Commitments of Traders Futures and Options report as of October 7th for Euro showedNon-Commercial traders were net short 144,000 contracts, an increase of 11,483 contracts. The Commercialtraders were net long 199,901 contracts, an increase of 19,142 contracts. The Non-reportable traders were netshort 55,901 contracts, an increase of 7,660 contracts. Non-Commercial and Non-reportable combined tradersheld a net short position of 199,901 contracts. This represents an increase of 19,143 contracts in the net shortposition held by these traders.
Technical Outlook: Stochastics are at mid-range but trending higher, which should reinforce a move higherif resistance levels are taken out. A negative signal for trend short-term was given on a close under the 9-barmoving average. The close below the 1st swing support could weigh on the market. The near-term upside targetis at 127.5725. The next area of resistance is around 126.8150 and 127.5725, while 1st support hits today at125.7050 and below there at 125.3525.