In addition to the Dollar showing signs of becoming technically overbought, doubt on the strength of the US economy was brought to the forefront following disappointing US GDP results at the end of last week. In fact, the “combined” spec and fund Net Long position in the Dollar also hit a new record level at 90,065 contracts early last week. However, it is possible that the Dollar might begin to garner some fresh support from expectations for the US Non-farm payroll report this coming Friday. The Dollar might be held back by a US Budget offering that raises the US debt load but residual concern toward Greece and increased fighting in the Ukraine probably takes some of the focus away from the ebb and flow of the US economic pace. The Commitments of Traders Futures and Options report as of January 27th for US Dollar showed Non-Commercial traders were net long 70,456 contracts, a decrease of 2,441 contracts. The Commercial traders were net short 90,066 contracts, an increase of 1,084 contracts. The Non-reportable traders were net long 19,609 contracts, an increase of 3,524 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 90,065 contracts. This represents an increase of 1,083 contracts in the net long position held by these traders. Up-Trend channel support in the March Dollar Index is seen at 94.09 and that support rises to 94.30 on Tuesday.
Technical Outlook: Stochastics turning bearish at overbought levels will tend to support lower prices if support levels are broken. The close above the 9-day moving average is a positive short-term indicator for trend. The market has a slightly positive tilt with the close over the swing pivot. The next downside objective is 94.50. The market is becoming somewhat overbought now that the RSI is over 70. The next area of resistance is around 95.23 and 95.41, while 1st support hits today at 94.77 and below there at 94.50.