Clearly the Euro has rejected the overt weakness seen at times last week as the Euro is seeminglyclimbing back toward last week’s highs without definitively bullish economic news flow. Solid support is apparentlyseen at 1.3697 and there might be little in the way of resistance seen until the 1.3731 level. In the battle of slackgrowth, the Euro is apparently preferred over the Dollar and that must be the result of residual confidence in theGerman economy! The Commitments of Traders Futures and Options report as of May 13th for Euro showedNon-Commercial traders were net short 2,244 contracts, an increase of 33,594 contracts which represents achange from a net long to net short position. The Commercial traders were net long 21,018 contracts, an increaseof 30,256 contracts which represents a change from a net short to net long position. The Non-reportable traderswere net short 18,773 contracts, a decrease of 3,340 contracts. Non-Commercial and Non-reportable combinedtraders held a net short position of 21,017 contracts. These traders have gone from a net long to a net shortposition and that might also feed the Euro higher off a technical reaction.
Technical Outlook: Momentum studies are declining, but have fallen to oversold levels. A negative signalfor trend short-term was given on a close under the 9-bar moving average. The market’s close below the pivotswing number is a mildly negative setup. The next downside target is now at 136.5850. The market isapproaching oversold levels on an RSI reading under 30. The next area of resistance is around 137.1699 and137.4250, while 1st support hits today at 136.7500 and below there at 136.5850.