Heading into the “home stretch” before the FOMC meeting on Wednesday, the Dollar is showinglackluster price action and continues to slide further away from last Friday’s spike highs. Mixed results withoverseas data points have provided little lasting benefit for the Dollar, which in any case still remains well short ofits previous safe-haven status. The market has come to terms that Fed tapering will certainly occur by March ofnext year, and at this point has been factored in to the Dollar’s inability to sustain upside momentum. While theDollar’s best hope of producing a recovery rally would be from a tapering move at Wednesday’s FOMC meeting,recent US data has not been consistently strong enough to make that more than a limited possibility at best.Today’s manufacturing-based US numbers could provide some measure of support, but the Dollar still has itswork cut out for it to regain lost ground early this week. The Dollar may slide down towards the 80.00 level afterthe US data window, and at this point the dollar needs global markets to become risk averse again in order toavoid even further chart damage. The Commitments of Traders Futures and Options report as of December 10thfor US Dollar showed Non-Commercial traders were net long 6,730 contracts, a decrease of 4,473 contracts. TheCommercial traders were net short 10,490 contracts, a decrease of 6,275 contracts. The Non-reportable traderswere net long 3,760 contracts, a decrease of 1,802 contracts. Non-Commercial and Non-reportable combinedtraders held a net long position of 10,490 contracts. This represents a decrease of 6,275 contracts in the net longposition held by these traders.
Technical Outlook: The stochastics indicators are rising from oversold levels, which is bullish andshould support higher prices. The market’s short-term trend is negative as the close remains below the 9-daymoving average. The downside closing price reversal on the daily chart is somewhat negative. The close over thepivot swing is a somewhat positive setup. The near-term upside objective is at 80.51. The next area of resistanceis around 80.33 and 80.51, while 1st support hits today at 80.06 and below there at 79.97.