The latest CFTC Positioning Report indicates that speculators had cut back on their net US Dollar short positions. In the week ended September 15, USD net shorts had fallen from the previous week’s value of $32.67 billion to $30.90 billion, in a report monitored by Reuters. The USD also saw net short positions against the NETUSDALL basket of currencies (RUB, NZD, MXN and BRL) from $32.99 billion to $31.52 billion.
These figures are all well below the 9-year highs seen in August 2020 when the US Dollar displayed extraordinary weakness against its peers. The drop in the net short positions on the USD is manifesting in pairings such as the USDCHF, where improved risk sentiment has allowed the greenback to gain against the safe-haven Swissy in the last four trading days.
The USDCHF is presently up 0.18% and is trading at 0.92138.
I identified what looked like a saucer pattern a week or two ago, and this appears to be holding as the latest price action has consistently found lows on the saucer line. This has enabled price action to propel to the lid of the saucer, where resistance lies at 0.92264 ((July 28 and August 3 highs). A breakout from here targets 0.93126, with 0.94004 and 0.94963 forming additional targets to the north.
On the flip side, rejection at 0.92264 allows for a retest of 0.91533. A breakdown of 0.91533 would invalidate the pattern, as a move below this area towards 0.90479 steps out of the saucer. If the move to 0.90479 is completed, then the market structure would resemble a sideways trend with the lid forming the ceiling of the range and the 0.90479 price level creating the floor.
