While the Euro showed some initial recovery action overnight, the technical and fundamental setupremains in favor of the bear camp. As suggested in Dollar coverage, the Euro saw generally disappointing datafrom German PPI figures and it was also presented with a much weaker than expected Italian Industrial turnoverfigures. To add to the downward bias the IMF head suggested that the markets were probably too upbeat onEurope, and that combined with an ECB desire to talk the Euro down would seem to lay the groundwork for aneventual slide to the 1.34 level. The Commitments of Traders Futures and Options report as of July 15th for Euroshowed Non-Commercial traders were net short 64,341 contracts, an increase of 2,699 contracts. TheCommercial traders were net long 106,200 contracts, an increase of 4,730 contracts. The Non-reportable traderswere net short 41,860 contracts, an increase of 2,032 contracts. Non-Commercial and Non-reportable combinedtraders held a net short position of 106,201 contracts. This represents an increase of 4,731 contracts in the netshort position held by these traders.
Technical Outlook: Daily stochastics declining into oversold territory suggest the selling may be drying upsoon. The market’s short-term trend is negative as the close remains below the 9-day moving average. It is aslightly negative indicator that the close was lower than the pivot swing number. The next downside target is134.7675. The next area of resistance is around 135.5049 and 135.6675, while 1st support hits today at 135.0550and below there at 134.7675.