Speculative dollar shorts are vulnerable
Oct 8 (Reuters) -There are fundamental and technical reasons why the dollar could see a bigger rise in coming sessions with outstanding speculative short positions vulnerable to being squeezed in the near-term.
The speculative dollar short position - derived from net contracts of International Monetary Market speculators in the euro, yen, pound, Swiss franc, Canadian and Australian dollars - has grown.
For the week ending Oct. 1, the value of net short positions held by speculators fell to $12.82 billion from $14.56 billion a week earlier. However, bids and buy stops associated with the remaining speculative shorts could lead to a bigger dollar recovery.
The dollar eased from near seven-week highs against major currencies on Tuesday as investors pondered the outlook for U.S. rate cuts, while escalating tensions in the Middle East dented risk sentiment.
The USD index, which tracks the dollar against a basket of six major currencies, fourteen-day momentum reading remains positive. There is scope for gains to the top of the daily cloud which currently spans the 101.93-103.32 region.
For more click on FXBUZ
Speculative Positions Chart: https://tmsnrt.rs/3BxSZCb
Daily Chart: https://tmsnrt.rs/4gX3uPq
Martin Miller is a Reuters market analyst. The views expressed are his own, editing by Ed Osmond
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