The Dollar has been able to post modest gains during overnight trading, but is clearly playing “secondstring” to the Yen as a flight-to-safety destination of choice this morning. After remaining subdued as a market factor during the recent events in Egypt, it has been this week’s development in Syria that has brought safe-haven support back as a front-and-center issue for global markets. Unfortunately for the Dollar, the last two “top-tier” US data releases – Durable Goods and New Home Sales – have produced some of the largest “misses” versus market forecasts seen during recent weeks. If Fed tapering is a matter of timing now, then upcoming US economic numbers will have to be strong for the Dollar to receive any sustained benefit. The Dollar should be able to climb up towards downtrend resistance around the 81.73 area but it will need a direct and positive reception to today’s Cash-Shiller and Conference Board readings. All things considered the Dollar will likely need several more session’s worth of decent US numbers before becoming a first-choice safe-haven destination once again.
Technical Outlook
USD (SEP): Positive momentum studies in the neutral zone will tend to reinforce higher price action. The close above the 9-day moving average is a positive short-term indicator for trend. It is a slightly negative indicator that the close was lower than the pivot swing number. The near-term upside target is at 81.67. The next area of resistance is around 81.54 and 81.67, while 1st support hits today at 81.29 and below there at 81.18.