The Dollar has been able to rebound from mild pressure at the start of the new trading week, and while staying clear of last week’s lows is showing few early signs of making any sustained recovery. The Fed’s inaction on tapering and Washington’s inaction on the debt ceiling continue to weigh on the Dollar, which has kept within a fairly tight range so far during today’s trading. There will be little in the way of “top-tier” US economic numbers until later on this week but with the Dollar currently second-choice to the Yen as a safe-haven destination, the market will need to see consistently positive US data in order to sustain upside momentum. There are early signs that a near-term low may have been put in with Thursday’s reversal, but the Dollar will need to see a reduction in Washington political rhetoric and stronger US data points in order to build onto this fledging recovery. The Dollar may rise up towards the 80.65 level later this morning, and should avoid a retest of last week’s low as today’s Fed speakers do not further dampen the market’s already diminished tapering expectations. The Commitments of Traders Futures and Options report as of September 17th for US Dollar showed Non-Commercial traders were net long 21,690 contracts, an increase of 682 contracts. The Commercial traders were net short 28,332 contracts, an increase of 49 contracts. The Non-reportable traders were net long 6,643 contracts, a decrease of 631 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 28,333 contracts. This represents an increase of 51 contracts in the net long position held by these traders.
Technical Outlook
USD (SEP): Momentum studies are declining, but have fallen to oversold levels. The market’s short-term trend is negative as the close remains below the 9-day moving average. The close over the pivot swing is a somewhat positive setup. The next downside target is now at 80.27. The 9-day RSI under 30 indicates the market is approaching oversold levels. The next area of resistance is around 80.68 and 80.82, while 1st support hits today at 80.40 and below there at 80.27.