After a fairly subdued overnight session, the Dollar has gravitated back towards unchanged levelswhile staying well inside of Monday’s trading range as time is running out to build the case for a December Fedtapering move. While a robust Industrial Production reading was one of the more solid data “beats” in recentmemory, US economic numbers have not shown the consistent strength needed to make a tapering move at thisweek’s FOMC meeting more than a possibility. The market has come to terms that Fed tapering will definitivelyoccur by March of next year, but any positive Dollar surprise would come if the Fed feels that current conditionsare strong enough already for them to cut back on asset purchases by the end of 2013. US inflation levels havenot been a source of support for the Dollar lately, so the market may have to look more towards overseas factorsthan today’s CPI reading to lift the Dollar further away from the weekly lows. The Dollar may climb up towards the80.36 level later this morning, but further gains will likely be held in check as it awaits tomorrow’s FOMC meetingresults.
Technical Outlook: Rising from oversold levels, daily momentum studies would support higherprices, especially on a close above resistance. The close below the 9-day moving average is a negative shorttermindicator for trend. The market’s close below the 1st swing support number suggests a moderately negativesetup for today. The next upside target is 80.30. The next area of resistance is around 80.17 and 80.30, while 1stsupport hits today at 79.92 and below there at 79.80.