After shaking off early pressure, the Dollar has been able to find moderate strength early this morning.Janet Yellen’s prepared testimony for today’s Senate hearing may have weakened the case for a Decembertapering, but the market may reserve judgment until she is “cross-examined” by Senators to gauge just howdovish a Fed chairman she will be. For all the near-term direction the Dollar has received from recent Fedcomments, it will be the tone of upcoming US economic data that will ultimately determine whether a Decembertapering is a viable possibility. Lukewarm data out of Europe has provided the Dollar with a sizable boost, butfurther gains may be held in check before a still-volatile Weekly Jobless Claims reading is digested by the market.If the Dollar can get past the Yellen testimony without receiving too dovish an outlook for Fed policy, a retest ofWednesday’s high could be on the near-term horizon. The Dollar should hold onto early strength going into theUS data window, but needs to avoid getting December tapering prospects fully dampened by Janet Yellen’sconfirmation hearing to have any chance of rising clear of last Friday’s post-Payroll highs.
Technical Outlook
USD (DEC): Rising stochastics at overbought levels warrant some caution for bulls. Themarket’s short-term trend is positive on the close above the 9-day moving average. The close below the 1st swingsupport could weigh on the market. The next upside objective is 81.49. The next area of resistance is around81.22 and 81.49, while 1st support hits today at 80.81 and below there at 80.67.