While continuing to lift clear of last week’s lows, the Dollar still appears to have trouble with puttingtogether an extended recovery from these current price levels. Monday’s Industrial Production reading may havebeen a positive surprise, but the Dollar is still in need of additional support from the US data front to overcome theburden of diminished near-term tapering expectations. Today’s fairly large and broad-based set of US economicnumbers will still need to avoid any negative surprises for the Dollar to consolidate these recent gains, as thelikelihood of steady Fed policy at tomorrow’s FOMC meeting decision is likely to keep near-term upside limited atbest. Overseas risk concerns may be doing a large portion of the heavy lifting this morning, but the Dollar stillneeds to find strength at home to lift decisively clear of this current low price levels. The Dollar may extend thisrally up towards the 79.66 level later today, but any larger upside move may have to wait until tomorrow’s FOMCdecision is out of the way. The Commitments of Traders Futures and Options report as of October 8th for USDollar showed Non-Commercial traders were net short 380 contracts, an increase of 2,072 contracts whichrepresents a change from a net long to net short position. The Commercial traders were net short 4,031 contracts,a decrease of 1,525 contracts. The Non-reportable traders were net long 4,411 contracts, an increase of 547contracts. Non-Commercial and Non-reportable combined traders held a net long position of 4,031 contracts. Thisrepresents a decrease of 1,525 contracts in the net long position held by these traders.
Technical Outlook
USD (DEC): Daily stochastics declining into oversold territory suggest the selling may bedrying up soon. The close below the 9-day moving average is a negative short-term indicator for trend. Themarket has a slightly positive tilt with the close over the swing pivot. The next downside target is now at 79.13.The next area of resistance is around 79.52 and 79.60, while 1st support hits today at 79.28 and below there at79.13.