Reuters: COMMENT-FX traders have the room to take dollar even higher

 

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.

For more details look here. 

Gold ticks higher as traders await Fed meeting

 By William Watts

Gold futures edged higher early Tuesday, building on the yellow metal's highest close in more than two weeks as traders awaited this week's Federal Reserve decision for clues on interest rates.

Price action

Market drivers

Gold has largely traded sideways since spring, and is off around 0.5% so far in September. It's seen pressure as Treasury yields advanced and the U.S. dollar strengthened. Higher yields raise the opportunity cost of holding nonyielding assets like gold, while a stronger dollar makes commodities more expensive to users of other currencies.

The Federal Reserve is fully expected to leave interest rates unchanged Wednesday when it concludes a two-day policy meeting, but investors will be looking for clues as to whether a further rate increase may be in store.

See: 4 things to watch for at this week's Fed monetary-policy meeting

"The question now for gold traders is whether the Fed is willing to acknowledge that it's probably done with rate hikes, as we heard from the ECB last week, or continue to insist another is likely," said Craig Erlam, senior market analyst at Oanda, in a note.

"The dot plot will be key to this but as always, traders will hang on Powell's every word. A hawkish tone from the Fed could put $1,900 in jeopardy," he wrote. The dot plot is the graph of interest-rate projections from individual Fed policy makers.

-William Watts

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.