The Euro forged a fresh spike down breakout overnight but it was unable to hold all of the initial declines. A critical bull/bear line is seen at 1.2506 from a recent spike low. Given the overnight data from the Euro zone,fresh geopolitical tensions surfacing from the Ukraine and an existing technical edge to the bear camp, we haveto leave the bears in control until the Euro becomes cheap enough that European companies show signs ofbenefiting from increased exports. The Commitments of Traders Futures and Options report as of October 28thfor Euro showed Non-Commercial traders were net short 163,419 contracts, an increase of 4,075 contracts. TheCommercial traders were net long 213,588 contracts, an increase of 3,619 contracts. The Non-reportable traderswere net short 50,169 contracts, a decrease of 457 contracts. Non-Commercial and Non-reportable combinedtraders held a net short position of 213,588 contracts. This represents an increase of 3,618 contracts in the netshort position held by these traders.
Technical Outlook: The sell-off took the market to a new contract low. Daily stochastics are trending lowerbut have declined into oversold territory. A negative signal for trend short-term was given on a close under the 9-bar moving average. The swing indicator gave a moderately negative reading with the close below the 1st supportnumber. The next downside target is now at 124.1350. The next area of resistance is around 125.9800 and126.7350, while 1st support hits today at 124.6800 and below there at 124.1350.