The September Euro may be finding mild pressure this morning, but has generally held its ground after last week’s choppy and volatile trading pattern. A slow and steady growth outlook has been spreading beyond Germany and the core EU, which is helping to provide underlying support for the Euro. Reports over the weekend of another Greek bailout and friction with the ruling coalition in Italy are the main sources of weakness for the Euro, but neither situation has caused any major increase in EU risk anxiety early this week. As long as global risk sentiment continues to mend and the news headline flow from the region remains quiet, the Euro should hold its ground near the top end of this recent uptrend. The September Euro should find support around the 133.48 area later today, but is unlikely to lose further ground unless EU risk anxiety becomes a front-and-center issue with global markets once again. The Commitments of Traders Futures and Options report as of August 20th for Euro showed Non-Commercial traders were net long 37,108 contracts, an increase of 21,809 contracts. The Commercial traders were net short 28,638 contracts, an increase of 29,583 contracts which represents a change from a net long to net short position. The Non-reportable traders were net short 8,469 contracts, a decrease of 7,775 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 28,639 contracts. These traders have gone from a net short to a net long position.
Technical Outlook
EUR (SEP): The daily stochastics gave a bullish indicator with a crossover up. Rising stochastics at overbought levels warrant some caution for bulls. The market’s close above the 9-day moving average suggests the short-term trend remains positive. It is a mildly bullish indicator that the market closed over the pivot swing number. The next upside target is 134.5550. The next area of resistance is around 134.2100 and 134.5550, while 1st support hits today at 133.4300 and below there at 132.9950.