With a senior EU policy maker warning of a “massive weakening in the Euro zone economy it might be the job of the market to pound the Euro to a point where confidence in the Euro zone is injured to a point where EU officials get on the same page with a response to rising deflationary threats. Near term downside targeting on the weekly Euro chart is the 2012 lows just above the 1.20 level. The Commitments of Traders Futures and Options report as of December 2nd for Euro showed Non-Commercial traders were net short 151,500 contracts, a
decrease of 8,814 contracts. The Commercial traders were net long 209,513 contracts, a decrease of 13,534 contracts. The Non-reportable traders were net short 58,014 contracts, a decrease of 4,719 contracts. Non- Commercial and Non-reportable combined traders held a net short position of 209,514 contracts. This represents a decrease of 13,533 contracts in the net short position held by these traders.
Technical Outlook: Daily stochastics are trending lower but 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 support number. The next downside objective is now at 121.9725. The next area of resistance is around 123.5650 and 124.3925, while 1st support hits today at 122.3550 and below there at 121.9725.