The Dollar failed yesterday after returning to the upside breakout point on the charts. Perhaps the market was short term overbought as the most recent positioning report showed that the Dollar Non-reportable Net Long position hit a new record level at 12,073 contracts early last week. However, the Dollar edge has returned again in the wake of a series of overnight economic readings that cast doubt on the Euro zone economy, the Russian economy and the UK economy. For good measure, there is also concern for the Chinese economy and recent Fed members have distinctly discounted deflationary fears for the US economy because of falling oil prices. In fact, 2 US Fed members on Monday seemingly welcomed the decline in oil prices, suggesting that the deflationary impact would be temporary and that the decline in oil prices would actually add to US GDP ahead. The US Dollar will see a series of private chain store sales results this morning and it will also get some early reads on Cyber Monday sales. Also due out from the US today is US Construction Spending, ISM New York Business Index results and domestic auto sales figures which are expected to have up ticked. The bull camp should be able to forge more new highs this week! The Commitments of Traders Futures and Options report as of November 25th for US Dollar showed Non-Commercial traders were net long 38,019 contracts, a decrease of 990 contracts. The Commercial traders were net short 50,092 contracts, a decrease of 311 contracts. The Nonreportable traders were net long 12,073 contracts, an increase of 680 contracts. Non-Commercial and Nonreportable combined traders held a net long position of 50,092 contracts. This represents a decrease of 310 contracts in the net long position held by these traders.
Technical Outlook: A crossover down in the daily stochastics is a bearish signal. Declining momentum studies in the neutral zone will tend to reinforce lower price action. The close above the 9-day moving average is a positive short-term indicator for trend. The market could take on a defensive posture with the daily closing price reversal down. The close below the 1st swing support could weigh on the market. The next downside target is 87.39. The next area of resistance is around 88.37 and 88.78, while 1st support hits today at 87.67 and below there at 87.39.