A pattern of lower highs is starting to surface on the Dollar charts and that is a little surprising in thewake of slack German Ifo readings overnight, mixed results on the Euro zone stress tests and with nodisconcerting US Ebola developments from the weekend. However, it is possible that the looming FOMC meetinghas softened the outlook for the Dollar. Some players think that the October swoon in equities, the US Ebolathreat and fears that Europe is in danger of falling back into recession, could prompt the Fed to throw off a dovishtone in the coming statement. The US has a rather active US scheduled report flow today, with pending homesales expected to produce a minor rise and a Texas Manufacturing reading due out in the early afternoon action.The Dollar appears to be out of favor to start and the path of least resistance is pointing downward to start. TheCommitments of Traders Futures and Options report as of October 21st for US Dollar showed Non-Commercialtraders were net long 49,972 contracts, an increase of 1,331 contracts. The Commercial traders were net short58,643 contracts, an increase of 385 contracts. The Non-reportable traders were net long 8,671 contracts, adecrease of 946 contracts. Non-Commercial and Non-reportable combined traders held a net long position of58,643 contracts. This represents an increase of 385 contracts in the net long position held by these traders.
Technical Outlook: Momentum studies are trending higher from mid-range, which should support amove higher if resistance levels are penetrated. A positive signal for trend short-term was given on a close overthe 9-bar moving average. The close below the 1st swing support could weigh on the market. The next upsidetarget is 86.20. The next area of resistance is around 85.98 and 86.20, while 1st support hits today at 85.59 andbelow there at 85.40.