After getting past a potential stumbling block with Janet Yellen’s Senate testimony, the Dollar has beenable to maintain modest upside momentum to consolidate towards the middle of this week’s volatile trading range.While there were clearly some “dovish” themes from Fed Vice Chair Yellen, her remarks were not enough tocompletely dampen hopes for a December Fed tapering move. Upcoming US economic data remains in the driverseat for determining the Dollar’s near-term direction, particularly with no major Fed speakers today to follow up onthe Yellen testimony, so the Dollar could get a fresh boost from strong readings on Industrial Production and theNY Fed’s Empire State survey. December tapering may still be just a remote possibility at this point, but thegenerally positive tone of recent US data should help the Dollar hold its ground going into the weekend. TheDollar may climb up towards the 81.35 level after the US data window, but a further rally above the recent highsmay be difficult without fresh “hawkish” commentary from Fed officials.
Technical Outlook
USD (DEC): A crossover down in the daily stochastics is a bearish signal. Momentum studiestrending lower from overbought levels is a bearish indicator and would tend to reinforce lower price action. Theclose above the 9-day moving average is a positive short-term indicator for trend. The close over the pivot swingis a somewhat positive setup. The next downside objective is 80.64. The next area of resistance is around 81.23and 81.46, while 1st support hits today at 80.83 and below there at 80.64.