Sept 5 (Reuters) – FX speculators seem to have the room to take the bullish US dollar even higher in the weeks ahead, especially as the euro looks set to drop much deeper under parity.
Commodity Futures Trading Commission data showed that for the week ended Aug. 30 the value of the net USD position held by speculators rose to USD 14.21 billion long, from USD 13.79 billion a week earlier. As the current long remains well below July’s USD 18.98 billion peak, however, there is room for the greenback to climb further.
The USD index, which tracks the dollar versus a basket of currencies, registered a weekly close above the broken 109.14 Fibo, a 76.4% retrace of the 121.02 to 70.698 (2001 to 2008) drop. That has increased the odds for much bigger gains to the 111.00 psychological level. Fourteen-week momentum remains positive, reinforcing the underlying bullish market structure.
The euro — the biggest component of the USD index — sank to a new 20-year low on Monday and below 0.9900 after Russia’s halt to gas supplies down its main pipeline to Europe heightened fears about a deepening energy crisis across the region.
(Martin Miller is a Reuters market analyst. The views expressed are his own, editing by Ed Osmond)
This article originally appeared on reuters.com