The second Fed tapering move left the Dollar somewhat in vogue and the flow of economic informationfrom the Euro zone overnight temporarily added to the Dollar’s edge. Surprisingly US data in the prior tradingsession was partially countervailing, but yet the Dollar was able to remain in an upward motion. This morning theEuro zone has seen much very soft inflation readings, softer German retail sales figures and only minimalimprovement in the Italian jobs situation. However, a noted resumption of this week’s downside washout in globalequities and in particular weakness in US stocks has undermined the Dollar’s safety buying. Therefore, theDollar’s upward bias on the charts could be challenged by even minimal disappointment in today’s US scheduledreport flow. In fact, with only minimal gains expected in US Personal Income and Spending figures, that couldincrease the focus on a Chicago ISM survey! Up trend support is seen this morning at 81.14 and resistance mightnot be seen until the 81.08 level and the failure to hold support levels could set up some technical stop lossselling in the Dollar.
Technical Outlook: The cross over and close above the 60-day moving average indicates thelonger-term trend has turned up. The crossover up in the daily stochastics is a bullish signal. Momentum studiesare trending higher from mid-range, which should support a move higher if resistance levels are penetrated. Theintermediate trend could be turning up with the close back above the 18-day moving average. The market has abullish tilt coming into today’s trade with the close above the 2nd swing resistance. The near-term upside target isat 81.66. The next area of resistance is around 81.48 and 81.66, while 1st support hits today at 80.87 and belowthere at 80.45.