The Euro chart remains ugly but perhaps the Euro is poised to see some modest cushion from news of positive results from the German ZEW. While EU QE is anticipated this week, that potential benefit is thought to be largely factored in already. In fact, fresh reports of Russian military incursions into the Ukraine, weak oil prices and reduced IMF global growth forecasts would seem to leave the fundamental picture negative for the Euro. The Commitments of Traders Futures and Options report as of January 13th for Euro showed Non-Commercial traders were net short 167,233 contracts, an increase of 14,096 contracts. The Commercial traders were net long 226,991 contracts, an increase of 16,614 contracts. The Non-reportable traders were net short 59,757 contracts, an increase of 2,515 contracts. Non-Commercial and Non-reportable combined traders held a net short position of 226,990 contracts. This represents an increase of 16,611 contracts in the net short position held by these traders. Down-trend channel resistance is seen up at 1.1718 and that resistance falls down to 1.1679 on Wednesday.
Technical Outlook: The market made a new contract low on the break. Daily stochastics are showing positive momentum from oversold levels, which should reinforce a move higher if near term resistance is taken out. The market’s close below the 9-day moving average is an indication the short-term trend remains negative. It is a slightly negative indicator that the close was under the swing pivot. The next upside target is 117.5774. Selling may soon dry up since the RSI is under 20 indicating the market is extremely oversold. The next area of resistance is around 116.7049 and 117.5774, while 1st support hits today at 114.8150 and below there at 113.7975.