Not surprisingly the Euro enters the pre-ECB rate decision window under pressure. With a series ofminimally slack Euro zone manufacturing PMI data points released overnight, the bear camp would seem to retainan edge. In fact, thin consolidation support down at a quasi-double bottom low of 1.3586 might not have muchhope of holding as the trade rushes to price in an easing move from the ECB. Strength in the Dollar on its chartssuggests that the downward bias in the Euro is likely to result in a downside breakout to the lowest level on thecharts since early February. The Commitments of Traders Futures and Options report as of May 27th for Euroshowed Non-Commercial traders were net short 17,451 contracts, an increase of 6,846 contracts. TheCommercial traders were net long 43,578 contracts, an increase of 8,904 contracts. The Non-reportable traderswere net short 26,127 contracts, an increase of 2,058 contracts. Non-Commercial and Non-reportable combinedtraders held a net short position of 43,578 contracts. This represents an increase of 8,904 contracts in the netshort position held by these traders.
Technical Outlook: The stochastics indicators are rising from oversold levels, which is bullish and shouldsupport higher prices. A negative signal for trend short-term was given on a close under the 9-bar movingaverage. Market positioning is positive with the close over the 1st swing resistance. The near-term upsideobjective is at 136.8049. The next area of resistance is around 136.5899 and 136.8049, while 1st support hitstoday at 136.0700 and below there at 135.7650.