The Euro this morning is continuing its Friday’s bounce higher. Europe’s Sentix Investor Confidence number came in with a positive reading of 6.5. This is the first positive number since August 2011. A positive number indicates optimism in the economy. Being a survey of 2,800 investors and analysts this number usually does not make wild swings month to month. Expectations were for a negative number. If the number was truly believable the Euro would be up substantially more. Because of the extreme oversold situation the Euro was in prior to Friday’s rally, we may just be seeing nothing more than a bounce in pricing and not a reversal in the Euro itself. The rest of today’s session should continue to have a positive bias but the upside will be limited in its pricing scope.
The Commitments of Traders Futures and Options report as of September 3rd for Euro showed Non-Commercial traders were net long 25,564 contracts, a decrease of 15,950 contracts. The Commercial traders were net short 11,176 contracts, a decrease of 23,419 contracts. The Nonreportable traders were net short 14,388 contracts, an increase of 7,468 contracts. Non-Commercial and Nonreportable combined traders held a net long position of 11,176 contracts. This represents a decrease of 23,418 contracts in the net long position held by these traders.
Technical Outlook
EUR (SEP): Momentum studies are declining, but have fallen to oversold levels. The close below the 9-day moving average is a negative short-term indicator for trend. The upside closing price reversal on the daily chart is somewhat bullish. It is a mildly bullish indicator that the market closed over the pivot swing number. The next downside target is 130.7725. The next area of resistance is around 132.1950 and 132.4725, while 1st support hits today at 131.3450 and below there at 130.7725.