The Euro is extremely oversold and is seeing the temporary benefits of technical balancing. From a fundamental perspective, the Euro gets some temporary lift from favorable German business survey readings but to stand up to the US economic edge clearly requires a series of disappointing US data points and or positive Euro zone data. Another issue that could keep the Euro off balance and vulnerable ahead is talk that the Russian military, might be poised to carve off a portion of Eastern Ukraine in the weeks ahead. The Commitments of Traders Futures and Options report as of November 18th for Euro showed Non-Commercial traders were net short 167,128 contracts, an increase of 4,912 contracts. The Commercial traders were net long 226,725 contracts, an increase of 1,679 contracts. The Non-reportable traders were net short 59,597 contracts, a decrease of 3,232 contracts. Non-Commercial and Non-reportable combined traders held a net short position of 226,725 contracts. This represents an increase of 1,680 contracts in the net short position held by these traders.
Technical Outlook: Stochastics are at mid-range but trending higher, which should reinforce a move higher if resistance levels are taken out. The market back below the 18-day moving average suggests the intermediateterm trend could be turning down. The close below the 2nd swing support number puts the market on the defensive. The near-term upside objective is at 126.2575. The next area of resistance is around 124.8850 and 126.2575, while 1st support hits today at 122.9550 and below there at 122.3975.