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.

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