With a fresh lower low for the move in the Euro overnight it would not seem like Euro zone factory growth was seen as overly supportive to start. Clearly the Euro is being undermined by persistent talk that the US Fed is indeed poised to raise rates in June and it is also possible that residual uncertainty from the Greek debt extension process is serving to keep the Euro off balance. In fact, talk that other EU members like Spain are taking a hardline stance toward Greece, highlights a potential rift within the EU and that has put the Euro under some minor pressure. Unless there is a definitive risk-on vibe and optimism toward the global economy is present, the Euro looks to remain off-balance. The Commitments of Traders Futures and Options report as of February 24th for Euro showed Non-Commercial traders were net short 173,501 contracts, a decrease of 5,673 contracts. The Commercial traders were net long 226,571 contracts, a decrease of 8,936 contracts. The Non-reportable traders were net short 53,069 contracts, a decrease of 3,263 contracts. Non-Commercial and Non-reportable combined traders held a net short position of 226,570 contracts. This represents a decrease of 8,936 contracts in the net short position held by these traders.
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 market’s close below the pivot swing number is a mildly negative setup. The next downside target is now at 111.3100. The market is approaching oversold levels on an RSI reading under 30. The next area of resistance is around 112.2900 and 112.7500, while 1st support hits today at 111.5700 and below there at 111.3100.