After finding initial pressure, the Dollar has been able to find its footing and is posting moderate gainsthis morning. For all of the ebb and flow of Fed tapering prospects since the FOMC meeting minutes release, ithas been overseas factors that have provided the Dollar with a more consistent source of strength during the pastfew sessions. This weekend’s Iran nuclear deal has strengthened risk appetites, which has benefited the Dollardue to the slump in gold, the Yen and the Swiss Franc. With no Fed speakers and only second-tier US data forthe market to digest, it may be difficult to build onto these early gains without fresh developments that strengthenthe case for near-term Fed tapering. The Dollar can extend today’s rebound up to the 81.07 level, but will clearlyneed definitively positive results from major US data points later this week in order to break out above theJuly/November downtrend and regain consistent upside momentum. The Commitments of Traders Futures andOptions report as of November 19th for US Dollar showed Non-Commercial traders were net long 14,685contracts, an increase of 961 contracts. The Commercial traders were net short 19,470 contracts, an increase of775 contracts. The Non-reportable traders were net long 4,784 contracts, a decrease of 188 contracts. NonCommercialand Non-reportable combined traders held a net long position of 19,469 contracts. This representsan increase of 773 contracts in the net long position held by these traders.
Technical Outlook
USD (DEC): Declining momentum studies in the neutral zone will tend to reinforce lower priceaction. The close under the 18-day moving average indicates the intermediate-term trend could be turning down.The defensive setup, with the close under the 2nd swing support, could cause some early weakness. The nextdownside target is now at 80.42. The next area of resistance is around 80.94 and 81.24, while 1st support hitstoday at 80.53 and below there at 80.42.