A slight retrenchment in the Dollar is being seen to start as the Dollar was probably a bit overdone intothe overnight highs. One might have expected Putin comments regarding referendums in Eastern Ukraine wouldhave provided some lift to the Dollar, but instead the Dollar is somewhat out of favor to start the new tradingweek. The US economic slate is nearly empty today with a Fed speech and a monthly Treasury statement. Laterthis week the markets will see US retail sales, inflation readings and Industrial Production results and for theDollar to hold a large portion of last week’s recovery action will probably require something definitively positivefrom the US data front. While the Dollar was oversold at last week’s lows it could be difficult to rise consistentlyabove the 80.00 level unless the US numbers are solid. The Commitments of Traders Futures and Options reportas of May 6th for US Dollar showed Non-Commercial traders were net short 1,624 contracts, an increase of 1,295contracts. The Commercial traders were net short 5,392 contracts, a decrease of 673 contracts. The Nonreportabletraders were net long 7,016 contracts, an increase of 621 contracts. Non-Commercial and Nonreportablecombined traders held a net long position of 5,392 contracts. This represents a decrease of 674contracts in the net long position held by these traders.
Technical Outlook: Momentum studies are declining, but have fallen to oversold levels. Themarket’s close below the 9-day moving average is an indication the short-term trend remains negative. Themarket’s close below the pivot swing number is a mildly negative setup. The next downside objective is now at79.10. With a reading under 30, the 9-day RSI is approaching oversold levels. The next area of resistance isaround 79.61 and 79.84, while 1st support hits today at 79.25 and below there at 79.10.