Not surprisingly the Dollar has registered yet another range up extension overnight. Helping the Dollarrally this morning was slack Chinese economic data, fresh tensions in the Ukraine following a vote and slack Eurozone factory order results. While some US data today looks to justify some of the strength in the Dollar, at leasttwo data points might cast some doubt on the definitive Dollar edge. In fact, favorable Construction Spending datais likely to be countervailed by unchanged ISM manufacturing readings and mixed US auto sales results. TheDollar is charging toward its record spec and fund long positioning of 68,000 contracts, with the Dollar from thelatest positioning mark-off gaining another 200 points! The US economy is stronger and faster than itscompetition, but does the US edge justify an unrelenting appreciation in the Dollar? The Commitments of TradersFutures and Options report as of October 28th for US Dollar showed Non-Commercial traders were net long50,074 contracts, an increase of 102 contracts. The Commercial traders were net short 58,919 contracts, anincrease of 276 contracts. The Non-reportable traders were net long 8,844 contracts, an increase of 173contracts. Non-Commercial and Non-reportable combined traders held a net long position of 58,918 contracts.This represents an increase of 275 contracts in the net long position held by these traders.
Technical Outlook: The market rallied to a new contract high. Studies are showing positivemomentum but are now in overbought territory, so some caution is warranted. A positive signal for trend shorttermwas given on a close over the 9-bar moving average. The market has a bullish tilt coming into today’s tradewith the close above the 2nd swing resistance. The next upside objective is 87.88. The market is becomingsomewhat overbought now that the RSI is over 70. The next area of resistance is around 87.50 and 87.88, while1st support hits today at 86.49 and below there at 85.86.