Jan 7 (Reuters) -

Traders considering adding to the speculative dollar long position should be mindful that the dollar's price action could be an early warning that its recent uptrend may be coming to an end.

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 April. For the week ending Dec. 31, the value of net positions held by speculators climbed to $29.20 billion long from $27.70 billion a week earlier.

The dollar eased towards a one-week low versus major peers on Tuesday as traders considered whether President-elect Donald Trump's proposed tariffs might be less aggressive than promised.

The USD index, which tracks the greenback against a basket of six major currencies, last week broke but failed to close above the major 108.962 Fibo, a 61.8% retrace of the 114.78 to 99.549 (2022 to 2023) drop. That is a possible "bull trap", set when a market breaks above a level but subsequently reverses, and is usually a bearish sign.

For more click on

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Dollar Speculative Positions Chart: Weekly Chart:

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

(Martin Miller is a Reuters market analyst. The views expressed are his own)

((martin.miller@thomsonreuters.com))