After yesterday’s volatile trading session, the Dollar has been able to consolidate within a fairly tighttrading range early this morning. While comments by Fed Regional Presidents Fisher and Lockhart provided freshfuel for December tapering ideas, a somewhat negative reaction to second-tier data points indicates that theDollar still needs to have further reinforcement from upcoming US economic readings in order to build onto thiscurrent recovery rally. With no major US numbers until later in the week, Fed President Pianalto’s comments thismorning will carry some weight with the market but it may be overseas events that ultimately drive the Dollar’snear-term direction. The Dollar is having a difficult time climbing decisively above last Friday’s post-Payroll highswithout the benefit of headline-grabbing US data but as long as December tapering remains a possibility, it shouldbe able to hold its ground in relatively close proximity to those recent highs. The Dollar may climb up towards the81.40 level later this morning, but is likely to remain well clear of new high ground until later on in the week.
Technical Outlook
USD (DEC): Daily stochastics have risen into overbought territory which will tend to supportreversal action if it occurs. A positive signal for trend short-term was given on a close over the 9-bar movingaverage. The daily closing price reversal up on the daily chart is somewhat positive. The market’s close below thepivot swing number is a mildly negative setup. The next upside target is 81.72. The next area of resistance isaround 81.43 and 81.72, while 1st support hits today at 80.98 and below there at 80.80.