The Dollar is finding moderate pressure this morning, and continues to give back recent gains as its recovery move appears to have run out of steam. Comments by Fed Regional President Bullard that the Fed needs to see more data before tapering can begin has put additional emphasis on US jobs and inflation readings, so yesterday’s weaker than expected PPI release effectively put the brakes on the Dollar’s rebound. There will be plenty of fresh US data for the market to digest this morning, including what are likely to be particularly taperingsensitive readings on CPI and Jobless Claims, so the Dollar will clearly have an opportunity to shake off this current pressure and regain upside momentum. The lack of safe-haven support from current events in Egypt is showing that Fed tapering prospects are in the driver’s seat for providing the Dollar’s overall direction, however, so a positive reception for today’s US data results will be a requirement for the Dollar to lift decisively clear of these recent low price levels. The Dollar may climb up towards the 81.73 area after the US data window, but will likely need a clean sweep of positive US data points today and tomorrow to reach up to a new weekly high.
Technical Outlook
USD (SEP): Stochastics are at mid-range but trending higher, which should reinforce a move higher if resistance levels are taken out. The close above the 9-day moving average is a positive short-term indicator for trend. It is a mildly bullish indicator that the market closed over the pivot swing number. The next upside objective is 82.02. The next area of resistance is around 81.89 and 82.02, while 1st support hits today at 81.66 and below there at 81.54.