Ongoing strength in the Dollar is expected to continue as the international macro economic bar is verylow especially with a German ZEW economic expectations softened overnight. While recent US data has beenrather anemic, Fed dialogue continues to suggest that economic headwinds are abating and the prospect of moretapering of purchases remains on the table. However, with US Treasuries overnight temporarily carving out afresh peak, that suggests US data hasn’t been overly impressive. In fact, with China moving to quell a recentliquidity crunch that might also limit safe haven interest in the Dollar overnight. Another limiting issue this morningfor the Dollar is that European equities hit a fresh 5 1/2 year high and US stocks were showing positive earlyaction. All things considered the Dollar is underpinned by somewhat hawkish comments from two Fed membersat the end of last week, as that dialogue is seemingly poised to control sentiment in the face of a nearly empty USeconomic report slate today. The Dollar might take some direction from a more active US earnings report flowover the coming trading sessions. Up trend channel support is seen down at 80.62 but closer in support is seen at81.34. The Commitments of Traders Futures and Options report as of January 14th for US Dollar showed Non-Commercial traders were net long 3,575 contracts, an increase of 6,169 contracts which represents a changefrom a net short to net long position. The Commercial traders were net short 8,935 contracts, an increase of 4,987contracts. The Non-reportable traders were net long 5,361 contracts, a decrease of 1,182 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 8,936 contracts. This represents anincrease of 4,987 contracts in the net long position held by these traders.
Technical Outlook:Daily stochastics have risen into overbought territory which will tend to supportreversal action if it occurs. The close above the 9-day moving average is a positive short-term indicator for trend.A positive setup occurred with the close over the 1st swing resistance. The near-term upside target is at 81.70.The next area of resistance is around 81.56 and 81.70, while 1st support hits today at 81.16 and below there at80.88.