While the Dollar initially posted a higher high for the move overnight it was unable to hold that move and even the Russian currency is making some gains against the Greenback. Perhaps some in the trade are seeing upside follow through in global equities and expectations for a slight decline in US existing home sales later today as a sign of an overbought Dollar market. In fact, the Non-reportable Net Long position in the Dollar index did hit a new record level at 14,437 contracts in the December 16th report. Furthermore, the Non-Commercial and Non-reportable combined traders held a net long position of 45,996 contracts and this is clearly understated given the 175 point in gains forged since the positioning report was measured. The trend in the Dollar is up but it might show some corrective action this morning, with up-trend channel support seen somewhat close down at 89.32.
Technical Outlook: The market made a new contract high on the rally. Rising stochastics at overbought levels warrant some caution for bulls. The market’s close above the 9-day moving average suggests the short-term trend remains positive. Market positioning is positive with the close over the 1st swing resistance. The near-term upside objective is at 90.22. The next area of resistance is around 90.07 and 90.22, while 1st support hits today at 89.57 and below there at 89.23.