After yet another lower low for the move overnight, the Dollar has rebounded off a series ofinternational developments. Initially the Dollar was pushed lower by improved sentiment toward Chinese lendingactivity and because of generally rising Asian equity market action. However, seeing the PBOC step up to reduceshadow banking and prompt some de-leveraging has served to lift the Dollar, after the Dollar was forced down tothe lowest levels since late December. Another issue that gave some lift to the Dollar was a disappointingGerman ZEW sentiment reading. In fact, global economic sentiment is rather discouraging this morning andseeing soft US data later this morning could serve to increase uncertainty in the marketplace even further. WhileUS scheduled data later today is mostly 2nd and 3rd tier data, the trade might take a lot of direction from the data,as the Chinese tightening move probably increases the fear of macro-economic headwinds. Clearly the Dollarwas oversold at the 80.00 level but seeing weakness in the NAHB or region manufacturing data later this morningcould quickly pin the Dollar back down at and below the 80.00 level later this morning. The Commitments ofTraders Futures and Options report as of February 11th for US Dollar showed Non-Commercial traders were netlong 6,329 contracts, an increase of 1,524 contracts. The Commercial traders were net short 13,089 contracts, anincrease of 1,404 contracts. The Non-reportable traders were net long 6,760 contracts, a decrease of 119contracts. Non-Commercial and Non-reportable combined traders held a net long position of 13,089 contracts.This represents an increase of 1,405 contracts in the net long position held by these traders.
Technical Outlook: Momentum studies are still bearish but are now at oversold levels and will tendto support reversal action if it occurs. The market’s close below the 9-day moving average is an indication theshort-term trend remains negative. It is a slightly negative indicator that the close was under the swing pivot. Thenext downside target is now at 79.95. The 9-day RSI under 30 indicates the market is approaching oversoldlevels. The next area of resistance is around 80.30 and 80.46, while 1st support hits today at 80.06 and belowthere at 79.95.