While it has found modest early support this morning, the Dollar has remained firmly within a tightovernight range as it prepares for this afternoon’s much-awaited FOMC meeting announcement. There is littledoubt in the market that Fed tapering will start by March of next year, but the Dollar’s recent haphazard tradingpattern has been due in large part to the ebb and flow of ideas that today’s FOMC meeting will begin the taperingprocess. This morning’s US data will be coming from a recent source of strength, the housing sector, but anychances for a large-scale upside move will have to wait until the Fed has their say on matters this afternoon. Evenwithout a tapering move today, hawkish Fed rhetoric will provide the Dollar with a decent boost as it will imply amove at the January meeting. The risk for the Dollar is from lukewarm guidance on the US economy that couldpush back a tapering move into March or beyond, as that would indicate that US data needs to be consistentlystronger. The Dollar could climb up towards the 80.36 level after the US housing data, but its near-term andlonger-term fate may be riding on how the market receives the FOMC meeting results this afternoon.
Technical Outlook: Rising from oversold levels, daily momentum studies would support higherprices, especially on a close above resistance. The market’s close below the 9-day moving average is anindication the short-term trend remains negative. The daily closing price reversal down puts the market on thedefensive. It is a slightly negative indicator that the close was lower than the pivot swing number. The next upsidetarget is 80.55. The next area of resistance is around 80.35 and 80.55, while 1st support hits today at 80.05 andbelow there at 79.94.