The Euro has been able to overcome a definitively discouraging Euro zone industrial output releaseperhaps because of German comments regarding interest rates being “too low”. Calls higher rates from the topGerman banker has given the Euro a bid today but threats from the ECB to restrain the gains in the Euro wouldseem to put on a cap on the potential gains directly ahead. Given the extremely weak Euro zone industrial dataand the evidence of Euro zone slowing last week, one has to see near term gains in the Euro as an opportunity toget short. The Commitments of Traders Futures and Options report as of July 8th for Euro showed Non-Commercial traders were net short 61,642 contracts, a decrease of 218 contracts. The Commercial traders werenet long 101,470 contracts, an increase of 4,034 contracts. The Non-reportable traders were net short 39,828contracts, an increase of 4,252 contracts. Non-Commercial and Non-reportable combined traders held a net shortposition of 101,470 contracts. This represents an increase of 4,034 contracts in the net short position held bythese traders.
Technical Outlook: Momentum studies trending lower at mid-range could accelerate a price break ifsupport levels are broken. The close below the 9-day moving average is a negative short-term indicator for trend.It is a slightly negative indicator that the close was under the swing pivot. The next downside objective is now at135.7875. The next area of resistance is around 136.2850 and 136.4475, while 1st support hits today at 135.9550and below there at 135.7875.