USD Mid-day Analysis

The Dollar is finding mild pressure at the start of the new trading week, and is showing little inclination for producing a third large-scale reversal in as many sessions. Given their pre-release hype, last Friday’s Payroll numbers were a disappointment to the market and were widely seen to have diminished the chances for a nearterm start for Fed tapering measures. The market will not have much in the way of fresh US data this morning other than the ISM’s non-Manufacturing index, so the Dollar may have to rely on overseas factors to overcome last Friday’s data and to put the brakes on this current pullback. News of US Embassy closings has provided little in the way of fresh safe-haven support, so the Dollar may have trouble making headway with repairing recent chart damage during today’s trade session. The Dollar may climb up towards the 82.05 level after today’s US data, but has a long way to go in order to find the positive tone it held in front of last Friday’s US jobs data.

The Commitments of Traders Futures and Options report as of July 30th for US Dollar showed Non-Commercial traders were net long 25,066 contracts, a decrease of 3,055 contracts. The Commercial traders were net short 32,480 contracts, a decrease of 1,039 contracts. The Nonreportable traders were net long 7,414 contracts, an increase of 2,016 contracts. Non-Commercial and Nonreportable combined traders held a net long position of 32,480 contracts. This represents a decrease of 1,039 contracts in the net long position held by these traders.

Technical Outlook

USD (SEP): Daily stochastics are showing positive momentum from oversold levels, which should reinforce a move higher if near term resistance is taken out. The market’s short-term trend is positive on the close above the 9-day moving average. The market could take on a defensive posture with the daily closing price reversal down. The swing indicator gave a moderately negative reading with the close below the 1st support number. The next upside target is 82.83. The next area of resistance is around 82.35 and 82.83, while 1st support hits today at 81.64 and below there at 81.42.

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