The Dollar is starting the week in a positive fundamental and technical position. In addition to residualsupport from positive US data at the end of last week, the Dollar is seeing additional support from slack GermanPPI data and Italian industrial activity results. Unfortunately for the Dollar bulls the Dollar has seen open interestcontinue to slide in the face of recent gains and the failure to hold last week’s upside probe leaves a sense thatthe Dollar has become expensive. However, a rejection of the 80.50 level overnight would seem to leave theDollar underpinned and some positive Chicago Fed National Activity Index results later this morning probablyleaves the Dollar pointing upward especially since there is a lack of competition from other currencies. TheCommitments of Traders Futures and Options report as of July 15th for US Dollar showed Non-Commercialtraders were net long 17,703 contracts, a decrease of 2,044 contracts. The Commercial traders were net short24,059 contracts, a decrease of 1,338 contracts. The Non-reportable traders were net long 6,356 contracts, anincrease of 706 contracts. Non-Commercial and Non-reportable combined traders held a net long position of24,059 contracts. This represents a decrease of 1,338 contracts in the net long position held by these traders.
Technical Outlook: Daily stochastics have risen into overbought territory which will tend to supportreversal action if it occurs. 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 upside objective is 80.83. Thenext area of resistance is around 80.71 and 80.83, while 1st support hits today at 80.51 and below there at 80.42.