Dollar virtually exploded to new highs for the move early this morning on talk of rising US ratesand perhaps because of talk of fresh sanctions against Russia as early as this Friday. Slow Swiss growth, risingsanctions fears and ideas that US payrolls will be strong this coming Friday, have left the Dollar in vogue to startthe holiday shortened week. However, from a technical perspective the Dollar might have forged a quasiexhaustionpattern with the spike up failure overnight and the realization that open interest has fallen off over thelast 4 sessions, in the face of ongoing gains on the charts! The Commitments of Traders Futures and Optionsreport as of August 26th for US Dollar showed Non-Commercial traders were net long 28,765 contracts, anincrease of 1,612 contracts. The Commercial traders were net short 36,999 contracts, an increase of 2,571contracts. The Non-reportable traders were net long 8,234 contracts, an increase of 959 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 36,999 contracts. This representsan increase of 2,571 contracts in the net long position held by these traders. We suspect that the net spec long isunder stated and that the Dollar needs a correction back below 82.50 before venturing back above the 83.00level.
Technical Outlook: The market rallied to a new contract high. The crossover up in the dailystochastics is a bullish signal. Daily stochastics have risen into overbought territory which will tend to supportreversal action if it occurs. The market’s short-term trend is positive on the close above the 9-day movingaverage. With the close over the 1st swing resistance number, the market is in a moderately positive position. Thenext upside objective is 83.01. The market is approaching overbought levels with an RSI over 70. The next areaof resistance is around 82.90 and 83.01, while 1st support hits today at 82.56 and below there at 82.33.