The Euro continues to win by default as weakness in the US economy is hardly the foundation for asustained rally in the Euro. As suggested in the Dollar coverage this morning, residual windfall from the Fridaynumber might be seen again today, but looming US Fed testimony on Tuesday, could make the overnight highs(1.3651) in the March Euro somewhat significant resistance. Some bulls see the rise above the 100 day movingaverage last week as a bullish trend signal, but we just don’t see the Euro zone data providing the impetus tothrow off the down trend that has been in place since the late December highs. The Commitments of TradersFutures and Options report as of February 4th for Euro showed Non-Commercial traders were net short 11,368contracts, an increase of 23,118 contracts which represents a change from a net long to net short position. TheCommercial traders were net long 39,080 contracts, an increase of 25,852 contracts. The Non-reportable traderswere net short 27,713 contracts, an increase of 2,735 contracts. Non-Commercial and Non-reportable combinedtraders held a net short position of 39,081 contracts. This represents an increase of 25,853 contracts in the netshort position held by these traders.
Technical Outlook: The cross over and close above the 60-day moving average is an indication thelonger-term trend has turned positive. Stochastics are at mid-range but trending higher, which should reinforce amove higher if resistance levels are taken out. The cross over and close above the 18-day moving averageindicates the intermediate-term trend has turned up. With the close higher than the pivot swing number, themarket is in a slightly bullish posture. The near-term upside target is at 137.1175. The next area of resistance isaround 136.8250 and 137.1175, while 1st support hits today at 135.8750 and below there at 135.2175.