Growing dollar spec longs should focus on these factors
Dec 16 (Reuters) -Speculative dollar long positions have grown, drawing increased attention to the fundamental and technical factors that could well drive the greenback higher in the days and weeks ahead.
The speculative long position - derived from net contracts of International Monetary Market speculators in the euro, yen, pound, Swiss franc, Canadian and Australian dollars - has risen to its highest level since July. For the week ending Dec. 10, the value of net positions held by speculators climbed to $22.88 billion long from $21.56 billion a week earlier.
The dollar hovered close to a three-week peak versus major peers on Monday, amid expectations that the Federal Reserve will cut interest rates this week but then signal a measured pace of easing for 2025. Traders are confident of a quarter-point Fed rate reduction on Wednesday but now expect officials to forgo a cut in January.
The USD index, which tracks the greenback against a basket of six major currencies, on Friday broke but failed close above the 107.066 Fibo, a 61.8% retraceof the 108.09 to 105.41 (November to December) drop. If the index can sustained trading above the 107.066 level, this week, that would add to the upside bias.
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Daily Chart: https://tmsnrt.rs/3ZW9l1c
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(Martin Miller is a Reuters market analyst. The views expressed are his own)
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