A relatively quiet overnight session helped the Dollar to consolidate this week’s recovery, but it will bedifficult to make further upside progress before today’s critical events are fully digested by the market. The Dollarwas able to overcome several pieces of soft US data yesterday that were highlighted by a surprisingly weakConsumer Confidence reading, which may indicate some further resiliency if today’s CPI and ADP jobs survey failto provide positive results. This afternoon’s FOMC meeting is unlikely to result in any changes to Fed policy butwith the market already pricing-in the expectation that tapering is off the table until into 2014, any sense of ahawkish Fed should provide the Dollar with a fresh boost of strength. The Dollar still has work to do to prove thatlast Friday’s reversal was a near-term low, much less to sustain any recovery, as it will need a steady diet of”good news” in order to find consistent upside momentum. The Dollar may find early support around the 79.55level, and will likely need decent US data in the morning with few surprises from the Fed this afternoon to hold itsground close to the overnight highs.
Technical Outlook
USD (DEC): The daily stochastics gave a bullish indicator with a crossover up. Dailymomentum studies are on the rise from low levels and should accelerate a move higher on a push through the 1stswing resistance. A positive signal for trend short-term was given on a close over the 9-bar moving average. Themarket has a bullish tilt coming into today’s trade with the close above the 2nd swing resistance. The next upsideobjective is 80.01. The next area of resistance is around 79.88 and 80.01, while 1st support hits today at 79.49and below there at 79.22.