The Euro generally remains in favor this morning and the Dollar remains near its recent lows and thatsuggests the currency trade sees the US as more likely to be draw into the Ukraine conflict than the Euro. TheEuro is weaker this morning in the wake of a slide in German Feb Manufacturing PMI and also because of ItalianGDP readings that showed a contraction of almost 2%. While the Euro has benefited from the overt weakness inthe Dollar and US data might foster more winning by default in the Euro this week, the Euro is probablyovervalued and vulnerable to a reality check. For the Euro to continue to rise above the late December highs,probably requires a much better global economic view than is currently present. In fact, some technical playerssee the October through present formation in the Euro to be a major head and shoulders top or at the very least,a massive broadening top formation, with the 1.38 level effectively restraining prices for 5 months. TheCommitments of Traders Futures and Options report as of February 25th for Euro showed Non-Commercialtraders were net long 9,910 contracts, an increase of 4,716 contracts. The Commercial traders were net long7,607 contracts, a decrease of 6,355 contracts. The Non-reportable traders were net short 17,517 contracts, adecrease of 1,639 contracts. Non-Commercial and Non-reportable combined traders held a net short position of7,607 contracts. This represents a decrease of 6,355 contracts in the net short position held by these traders.
Technical Outlook: The daily stochastics have crossed over up which is a bullish indication. Dailystochastics have risen into overbought territory which will tend to support reversal action if it occurs. The closeabove the 9-day moving average is a positive short-term indicator for trend. The market’s close above the 2ndswing resistance number is a bullish indication. The next upside objective is 139.1500. The next area ofresistance is around 138.7200 and 139.1500, while 1st support hits today at 137.4000 and below there at136.5100.