Euro zone Consumer Confidence readings overnight combined with a German rail workers strike to leave fears of a return to recession in the Euro zone in a front and center standing. With open interest in the Euroshowing sideways action and volume holding at low levels there doesn’t appear to be a technical sign of animpending low in the currency. In fact, given the damaged status of economic conditions in the Euro zone, asweep of positive US economic data later today looks to facilitate even more downside action in the Euro. TheCommitments of Traders Futures and Options report as of September 23rd for Euro showed Non-Commercialtraders were net short 143,263 contracts, an increase of 2,005 contracts. The Commercial traders were net long193,412 contracts, a decrease of 1,623 contracts. The Non-reportable traders were net short 50,149 contracts, adecrease of 3,628 contracts. Non-Commercial and Non-reportable combined traders held a net short position of193,412 contracts. This represents a decrease of 1,623 contracts in the net short position held by these traders.Longer term downside targeting in the Euro is now seen off the weekly charts below the 1.25 level.
Technical Outlook: The market was pushed to a new contract low. Momentum studies are declining, buthave fallen to oversold levels. The market’s close below the 9-day moving average is an indication the short-termtrend remains negative. The swing indicator gave a moderately negative reading with the close below the 1stsupport number. The next downside objective is now at 126.2375. With a reading under 30, the 9-day RSI isapproaching oversold levels. The next area of resistance is around 127.3450 and 127.9375, while 1st support hitstoday at 126.4950 and below there at 126.2375.