Some traders might look to the quasi-double top on the Dollar chart this morning and predict somedownside action ahead. While the expectations for U.S. durable goods look to facilitate more downside action inthe Dollar, renewed fears of deflation in Europe are probably providing some spillover support to the Greenback.Talk that the BOE is getting closer to hiking rates has probably served to pressure the Dollar early today but toreverse the slide in the Dollar this morning will probably require a Durable goods release that is better than initialexpectations of -0.7%. However, the US economic report slate is very active today with readings on Home prices,Consumer Confidence and at least two regional Fed activity readings scheduled for release. While Durables willdominate sentiment today, the trade is likely to take some direction from the US housing news as the Fedexpressed concern for US housing in recent testimony and in the FOMC meeting minutes. Pushed into the Dollartoday, we suspect at least a temporary retest of consolidation support down at 80.05. The Commitments ofTraders Futures and Options report as of May 20th for US Dollar showed Non-Commercial traders were net short271 contracts, a decrease of 26 contracts. The Commercial traders were net short 4,995 contracts, an increase of384 contracts. The Non-reportable traders were net long 5,265 contracts, an increase of 358 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 4,994 contracts. This represents anincrease of 384 contracts in the net long position held by these traders.
Technical Outlook: Momentum studies are trending higher but have entered overbought levels. Apositive signal for trend short-term was given on a close over the 9-bar moving average. A positive setup occurredwith the close over the 1st swing resistance. The near-term upside target is at 80.62. The 9-day RSI over 70indicates the market is approaching overbought levels. The next area of resistance is around 80.54 and 80.62,while 1st support hits today at 80.35 and below there at 80.22.