The September Euro was able to hold onto a large portion of last Friday’s sizable rebound, but once again is having trouble with sustaining a move above the 133.00 level. Today’s set of Euro zone Service-sector PMI data generally showed some modest improvement, but a weaker than expected German reading is weighing on prices this morning. Stronger than expected PMI numbers for Spain and Italy may prove to be a key factor for the Euro this morning, as they will help to keep peripheral EU debt yields subdued early this week. Although political developments in Italy are threatening to flash over, the Euro is likely to hold its ground near the monthly highs just as long as news headlines from the region can remain fairly quiet. The September Euro should find support around the 132.58 level this morning, and is likely to remain relatively well supported early this week.
The Commitments of Traders Futures and Options report as of July 30th for Euro showed Non-Commercial traders were net short 11,607 contracts, a decrease of 19,818 contracts. The Commercial traders were net long 30,484 contracts, a decrease of 17,553 contracts. The Nonreportable traders were net short 18,877 contracts, an increase of 2,265 contracts. Non-Commercial and Nonreportable combined traders held a net short position of 30,484 contracts. This represents a decrease of 17,553 contracts in the net short position held by these traders.
EUR (SEP): Daily stochastics turning lower from overbought levels is bearish and will tend to reinforce a downside break especially if near term support is penetrated. The market’s short-term trend is positive on the close above the 9-day moving average. The upside closing price reversal on the daily chart is somewhat bullish. Market positioning is positive with the close over the 1st swing resistance. The next downside target is now at 131.5300. The next area of resistance is around 133.3900 and 133.7300, while 1st support hits today at 132.2900 and below there at 131.5300.
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