The Dollar is grinding out a modest gain at the start of the new trading week, but for the moment is showing little inclination for breaking out of a fairly tight trading range this morning. Last Friday’s surprisingly weak New Home Sales reading threw another curve ball into the tapering debate, as recent US economic data continues to put up mixed results. With little in the way of market-moving Fed rhetoric coming out of the Jackson Hole Symposium, the market’s tapering debate will focus on the next top-tier US number to digest, today’s Durable goods reading. Unless safe-haven support becomes a front-burner issue once again, the Dollar will remain data dependent – and will clearly need to see a string a positive US economic results in order to regain any sort of strong upside momentum. The Dollar may climb up towards the 81.56 level with a positive spin from the Durable Goods number, but is unlikely to see a retest of last week’s spike high until US data is able to reinforce near-term Fed tapering prospects. The Commitments of Traders Futures and Options report as of August 20th for US Dollar showed Non-Commercial traders were net long 12,093 contracts, a decrease of 3,368 contracts. The Commercial traders were net short 18,074 contracts, a decrease of 3,626 contracts. The Nonreportable traders were net long 5,981 contracts, a decrease of 258 contracts. Non-Commercial and Nonreportable combined traders held a net long position of 18,074 contracts. This represents a decrease of 3,626 contracts in the net long position held by these traders.
Technical Outlook
USD (SEP): Positive momentum studies in the neutral zone will tend to reinforce higher price action. The intermediate trend has turned down with the cross over back below the 18-day moving average. It is a slightly negative indicator that the close was lower than the pivot swing number. The next upside objective is 81.89. The next area of resistance is around 81.63 and 81.89, while 1st support hits today at 81.19 and below there at 80.99.