The Dollar is staying close to unchanged levels this morning, and is finding little benefit from safehaven support coming out of this weekend’s developments both at home and abroad. There has been plenty of rhetoric but little progress towards resolving the Washington budget conflict, which is likely to cast a long shadow over global markets throughout today’s trading session. Recent US economic data has avoided any sizable “misses”, but has also provided few highlights that the Dollar can use to build a recovery in the wake of the Fed’s tapering postponement. With only the Chicago Fed Index and a PMI reading for the market to digest, the Dollar’s best hope for climbing back towards the upper portion of the recent consolidation zone will likely come from the market seeing positive vibes out of Washington. The Dollar may be heading for a retest of Friday’s 80.205 low later on this morning, and needs to get out from under Washington budget acrimony before having any chance of putting together any extensive recovery from these current price levels. The Commitments of Traders Futures and options report as of September 24th for US Dollar showed Non-Commercial traders were net long 3,686 contracts, a decrease of 18,004 contracts. The Commercial traders were net short 8,032 contracts, a decrease of 20,300 contracts. The Non-reportable traders were net long 4,346 contracts, a decrease of 2,297 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 8,032 contracts. This represents a decrease of 20,301 contracts in the net long position held by these traders.
Technical Outlook
USD (DEC): A crossover down in the daily stochastics is a bearish signal. Daily stochastics declining into oversold territory suggest the selling may be drying up soon. The close below the 9-day moving average is a negative short-term indicator for trend. The market’s close below the 1st swing support number suggests a moderately negative setup for today. The next downside objective is now at 79.92. The next area of resistance is around 80.60 and 80.90, while 1st support hits today at 80.12 and below there at 79.92.