While the March Dollar index has started the new trading week off its recent highs, the bullish tiltremains in place. In addition to residual emerging market concerns, the trade also seems to view the economicsituation in China with some trepidation. Apparently the US Fed remains somewhat committed to ongoingtapering action despite the pressure those policies seem to be creating for many smaller currencies around theglobe. Undermining the Dollar to start this morning, is partially supportive news from the Euro zone in the wake ofnews that Euro zone government debt fell down to the lowest level since the end of 2008. The Dollar might alsobe off balance because of upbeat factory order results from Europe and from the UK. In fact, German JanuaryManufacturing PMI data overnight came in higher than expectations and that data was joined by a sharp jump inJapanese auto sales figures. While economic data from the US hasn’t been stellar of late, the data has apparentlybeen strong enough to leave the Dollar at two month highs but the focus of the trade is likely to shift toward thecoming Non farm payroll report later today. However, there will be a rather active flow of US data today, with anISM manufacturing report potentially setting the tone for the session. The Commitments of Traders Futures andOptions report as of January 28th for US Dollar showed Non-Commercial traders were net long 3,809 contracts, adecrease of 212 contracts. The Commercial traders were net short 10,293 contracts, a decrease of 1,268contracts. The Non-reportable traders were net long 6,483 contracts, a decrease of 1,056 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 10,292 contracts. This represents adecrease of 1,268 contracts in the net long position held by these traders.
Technical Outlook: Positive momentum studies in the neutral zone will tend to reinforce higher priceaction. A positive signal for trend short-term was given on a close over the 9-bar moving average. With the closehigher than the pivot swing number, the market is in a slightly bullish posture. The near-term upside target is at81.67. The next area of resistance is around 81.55 and 81.67, while 1st support hits today at 81.19 and belowthere at 80.96.