After shaking off early pressure, the Dollar may be waiting on today’s critical events before makingfurther inroads into positive territory. While fairly dovish comments from Fed Chairman Bernanke provided someovernight headwinds, it has been modest support from overseas that has lifted the Dollar away from a 1 1/2 weeklow. The market will have several top-tier US data points to digest, highlighted by a key reading on CPI, but it willlikely be the latest FOMC meeting minutes that will most impact the Dollar’s near-term direction. With several Fedofficials hinting at near-term tapering in recent weeks, the market will need to see some “hawkish” items from theOctober meeting in order for the Dollar to sustain upside momentum. The Dollar may climb up towards the 80.86level with a positive reception for today’s US data, but further gains will be held in check until the market candigest the FOMC meeting minutes this afternoon.
Technical Outlook
USD (DEC): The major trend has turned down with the cross over back below the 60-daymoving average. Momentum studies trending lower at mid-range should accelerate a move lower if support levelsare taken out. A negative signal for trend short-term was given on a close under the 9-bar moving average. Themarket tilt is slightly negative with the close under the pivot. The next downside target is 80.45. The next area ofresistance is around 80.83 and 80.98, while 1st support hits today at 80.57 and below there at 80.45.