The Dollar was able to make it through a bumpy overnight session by regaining strong upside momentum early this morning, and has now climbed to within striking distance of reaching a new 3- week high later on during today’s trading. While events in Syria are still shadowing global markets, diminishing chances for military intervention this week as well as rebounding Asian emerging market currencies has helped to shift flight to safety flows out of Yen and back into Dollars. Weak economic data from Japan and Germany has also strengthened the Dollar as well, but upcoming US economic data will need to avoid any negative surprises for today’s gains to be sustained. Yesterday’s sluggish Pending Home Sales numbers may have been foreshadowed by last Friday’s abysmal New Home Sales data, but the Dollar will have few excuses if today’s Jobless Claims and GDP reading disappoint the market. The Dollar may find tough resistance around the 82.00 level if today’s US data fuels additional gains later this morning, but at this point the dollar is showing early signs of being able to overcome Fed tapering doubts and being the safe-haven destination of choice once again.
Technical Outlook
USD (SEP): Momentum studies are trending higher from mid-range, which should support a move higher if resistance levels are penetrated. The intermediate trend could be turning up with the close back above the 18-day moving average. The daily closing price reversal up on the daily chart is somewhat positive. A positive setup occurred with the close over the 1st swing resistance. The next upside target is 81.92. The next area of resistance is around 81.71 and 81.92, while 1st support hits today at 81.21 and below there at 80.92.