While finding its footing after two sessions of chaotic trading, the Dollar still has its work cut out for it tofinish out 2013 with a definitively positive tone. The start of Fed tapering has meant that the market will have littletolerance for sluggish US data points, so a lukewarm Pending Home Sales reading helped to fuel ideas that thepace of tapering may not be as optimistic as earlier thought. With few fresh overseas news items for the market todigest, today’s set of US economic numbers will play a key role with whether the Dollar can follow-through on thismorning’s early strength. Safe-haven support is unlikely to be a factor during today’s session, so the Dollar needsto avoid any negative surprises from this morning’s US data to continue grinding its way to the upside. The Dollarcan bounce back towards the 80.42 area after the US data window, but it likely to finish out the year somewhat onthe defensive given that Fed tapering is a “known” factor to the market now. The Commitments of Traders Futuresand Options report as of December 24th for US Dollar showed Non-Commercial traders were net short 4,709contracts, a decrease of 1,537 contracts. The Commercial traders were net long 342 contracts, a decrease of2,395 contracts. The Nonreportable traders were net long 4,367 contracts, an increase of 858 contracts. Non-Commercial and Nonreportable combined traders held a net short position of 342 contracts. This represents adecrease of 2,395 contracts in the net short position held by these traders.
Technical Outlook: The daily stochastics have crossed over down which is a bearish indication.Momentum studies trending lower at mid-range could accelerate a price break if support levels are broken. Themarket back below the 18-day moving average suggests the intermediate-term trend could be turning down. Themarket tilt is slightly negative with the close under the pivot. The next downside objective is 79.72. The next areaof resistance is around 80.42 and 80.76, while 1st support hits today at 79.90 and below there at 79.72.