The “combined” spec and fund Net Long position in the Dollar hit a new record level at 64,850 contracts but the Dollar to the highs last Thursday was as much as 83 ticks above the level where the COT reportwas measured and therefore the record spec long is probably understated. However, the fundamental news flowcontinues to favor the bull camp with the markets this morning already presented with fresh evidence of slowingfrom German Industrial orders and there was also a noted decline in Euro zone sentiment. One might expect tosee additional support for the Dollar from reduced World Bank growth forecasts for China. Solid support in theDecember Dollar is seen down at 86.33, with long term up trend channel support seen down at 85.85 today. Uptrendchannel support in the Dollar rises to 86.47 by this Friday. The Commitments of Traders Futures andOptions report as of September 30th for US Dollar showed Non-Commercial traders were net long 56,185contracts, a decrease of 749 contracts. The Commercial traders were net short 64,849 contracts, an increase of319 contracts. The Non-reportable traders were net long 8,665 contracts, an increase of 1,068 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 64,850 contracts. This representsan increase of 319 contracts in the net long position held by these traders.
Technical Outlook: The market rallied to a new contract high. A bullish signal was given with anupside crossover of the daily stochastics. Rising stochastics at overbought levels warrant some caution for bulls.The market’s close above the 9-day moving average suggests the short-term trend remains positive. There couldbe more upside follow through since the market closed above the 2nd swing resistance. The next upside objectiveis 87.69. The market is becoming somewhat overbought now that the RSI is over 70. The next area of resistanceis around 87.36 and 87.69, while 1st support hits today at 86.22 and below there at 85.39.