While the Dollar has forged some wild two-sided action over the last two trading sessions, the tradeseemed to definitively reject the Friday slide below recent consolidation low support of 87.43. Comments from theUK Prime Minister over the weekend that the Euro zone risks falling back into recession combined with news of areturn to recession in Japan, should leave the US Dollar with an edge to start the new trading week. Adding intothe Dollar’s edge is the expectation for a noted improvement in a US Empire State Manufacturing survey and byexpectations for modest improvement in US Industrial Production and Capacity Utilization readings. In conclusion,positive US data combined with extremely low expectations outside of the US, should set the stage for a quickreturn to the November highs in the Dollar. The Commitments of Traders Futures and Options report as ofNovember 11th for US Dollar showed Non-Commercial traders were net long 41,260 contracts, a decrease of1,096 contracts. The Commercial traders were net short 52,729 contracts, a decrease of 1,286 contracts. TheNon-reportable traders were net long 11,468 contracts, a decrease of 191 contracts. Non-Commercial and Nonreportablecombined traders held a net long position of 52,728 contracts. This represents a decrease of 1,287contracts in the net long position held by these traders.
Technical Outlook: The market made a new contract high on the rally. Momentum studies aretrending lower from high levels which should accelerate a move lower on a break below the 1st swing support.The close below the 9-day moving average is a negative short-term indicator for trend. The outside day down andclose below the previous day’s low is a negative signal. The market’s close below the 1st swing support numbersuggests a moderately negative setup for today. The next downside objective is now at 86.84. Bearish dailystudies indicate selling minor rallies this session. The next area of resistance is around 88.03 and 88.65, while 1stsupport hits today at 87.13 and below there at 86.84.