The Euro has respected last week’s spike down lows and is showing some consolidation capacity to startthe action today. However, slack French business sentiment readings and renewed anxiety in Eastern Ukrainehas put a certain amount of resistance over the top of the Euro this morning. We still think the Euro is over valued fundamentally but in order to deflate the Euro consistently probably requires better US data ahead. It is alsopossible that the Euro found some value at the recent lows as many traders think the Euro zone economy is set tooutperform the US in the short term. We see somewhat solid support today at the 1.3747 level especially with theUS economic report slate inactive. The Commitments of Traders Futures and Options report as of May 6th forEuro showed Non-Commercial traders were net long 31,350 contracts, an increase of 6,088 contracts. TheCommercial traders were net short 9,238 contracts, an increase of 7,063 contracts. The Non-reportable traderswere net short 22,113 contracts, a decrease of 974 contracts. Non-Commercial and Non-reportable combinedtraders held a net long position of 9,237 contracts. This represents an increase of 7,062 contracts in the net longposition held by these traders.
Technical Outlook: The market back below the 60-day moving average suggests the longer-term trendcould be turning down. Momentum studies trending lower at mid-range could accelerate a price break if supportlevels are broken. The market’s close below the 9-day moving average is an indication the short-term trendremains negative. The market setup is somewhat negative with the close under the 1st swing support. The nextdownside objective is now at 136.7500. The next area of resistance is around 138.0700 and 138.7500, while 1stsupport hits today at 137.0700 and below there at 136.7500.