The Dollar has regained some footing without a definitive escalation of emerging markets anxiety.Limiting the Dollar is news of strength in a German Business confidence reading and ideas that the US Fed mighthave to hold off on additional tapering because of the emerging market currency knock on impact from furtherstimulus removal. Others suggest that the Dollar has been under pressure recently because US data fails tojustify an aggressive unwinding of asset purchases and seeing an escalation of anxiety outside of the US isprobably having some impact inside the Fed. With the added turmoil of renewed US debt ceiling fears, the Fedmight come to the conclusion that the risk of premature tightening is on the rise again. While the market will bepresented with a residential home sales reading, expectations for that report call for a decline and that couldrekindle pressure on the Dollar to start the new trading week. The Commitments of Traders Futures and Optionsreport as of January 21st for US Dollar showed Non-Commercial traders were net long 4,021 contracts, anincrease of 446 contracts. The Commercial traders were net short 11,561 contracts, an increase of 2,626contracts. The Non-reportable traders were net long 7,539 contracts, an increase of 2,178 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 11,560 contracts. This representsan increase of 2,624 contracts in the net long position held by these traders. Initial downside targeting in theMarch Dollar is seen at 80.39 and then again down at 80.22.
Technical Outlook: Momentum studies trending lower at mid-range could accelerate a price break ifsupport levels are broken. The market’s close below the 9-day moving average is an indication the short-termtrend remains negative. It is a slightly negative indicator that the close was lower than the pivot swing number.The next downside target is now at 80.06. The next area of resistance is around 80.74 and 80.90, while 1stsupport hits today at 80.32 and below there at 80.06.