Although it appears to have put in a near-term floor with last Friday’s reversal, the Euro is having difficultywith building onto this morning’s modest early gains. A surprisingly strong set of German import prices hasprovided some needed help on the Euro zone inflation front, but a decline in Italian Consumer Confidence isgiving some pause for thought during these thin pre-holiday trading conditions. A generally positive end-of-yearvibe from the region should help the Euro maintain upside momentum, but it may come down to how the marketviews this morning’s US data for prices to make any sharp jump from these current price levels. The March Euromay retest near-term resistance around the 136.95 level, and should continue to gain ground going into theChristmas holiday. The Commitments of Traders Futures and Options report as of December 17th for Euroshowed Non-Commercial traders were net long 27,512 contracts, an increase of 12,397 contracts. TheCommercial traders were net short 9,961 contracts, an increase of 17,070 contracts which represents a changefrom a net long to net short position. The Non-reportable traders were net short 17,551 contracts, a decrease of4,673 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 9,961contracts. These traders have gone from a net short to a net long position.
Technical Outlook: Declining momentum studies in the neutral zone will tend to reinforce lower priceaction. The close below the 9-day moving average is a negative short-term indicator for trend. The upside closingprice reversal on the daily chart is somewhat bullish. The market has a slightly positive tilt with the close over theswing pivot. The next downside objective is 135.8650. The next area of resistance is around 137.1600 and137.5450, while 1st support hits today at 136.3200 and below there at 135.8650.