The Dollar showed a fresh downside breakout overnight and in turn reached down to the lowest levelsince January 2nd. In other words, residual pressure from the disappointing US payroll data has continued to foster long liquidation and perhaps some fresh outright selling of the Greenback. It is also possible that positivedata from Germany overnight and less negative sentiment flowing from China, added to the pressure in theDollar. In looking ahead, the economic report slate today is mostly empty and that could leave the focus on a Fedspeech later in the Day. Pushed into the market we have to leave the edge with the bear camp, as slack earningsfrom bellwether Alcoa, soft Non Farm payroll data and weakness in US equities suggests the recent weakness inthe Dollar might be set to continue. The Commitments of Traders Futures and Options report as of January 7th forUS Dollar showed Non-Commercial traders were net short 2,594 contracts, a decrease of 1,708 contracts. TheCommercial traders were net short 3,948 contracts, an increase of 4,260 contracts which represents a changefrom a net long to net short position. The Non-reportable traders were net long 6,543 contracts, an increase of2,555 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 3,949contracts. These traders have gone from a net short to a net long position.
Technical Outlook: A crossover down in the daily stochastics is a bearish signal. Momentum studiestrending lower from overbought levels is a bearish indicator and would tend to reinforce lower price action. Anegative signal for trend short-term was given on a close under the 9-bar moving average. There could be someearly pressure today given the market’s negative setup with the close below the 2nd swing support. The nextdownside target is 80.20. The next area of resistance is around 81.06 and 81.49, while 1st support hits today at80.42 and below there at 80.20.