The U.S. dollar has room to make even bigger gains in the days and weeks ahead as the speculative long position is not big enough to limit further greenback gains.
Commodity
Futures Trading Commission data showed that for the week ending Oct. 24, the
value of net long positions held by speculators was trimmed slightly to $9.37
billion from $9.59 billion a week earlier. The position has fallen for three
weeks in a row from the $10.10 billion peak, which was the biggest speculative
long in just under a year. A smaller speculative long position means there is
likely to be a reduction in offers and vulnerable sell stops in the market.
The USD
index, which tracks the dollar versus a basket of six currencies, last Tuesday
slipped under the 105.501 Fibo - a 23.6% retrace of the 99.549 to 107.34 (July
to October) rise. However, a bear trap was set when it failed to register close
below 105.501 at the end of Tuesday's trading. The scope grows for a bullish
extension to test the 107.34 2023 peak eventually.
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