More Dollar gains overnight suggests that the combination of rather hot US inflation readings andsuspicion toward growth in France and Italy has shifted sentiment in the Greenback more fully in favor of the bullcamp. In fact, seeing negative growth in Italy and seeing some of the impressive German growth readings tampeddown of late, has probably lowered the global economic growth bar to a very low level. Therefore seeing German1st quarter GDP growth at a scant 0.8% gain hardly trumps the projected growth rate in the US. While the tradedoubts the US Fed will step up to extinguish inflationary pressures, it does seem as if a large portion of thecurrency trade is anticipating easing from the ECB next month. The path of least resistance is up in the Dollareven if the gains in the Dollar are the result of a lack of alternatives.
Technical Outlook: Daily stochastics have risen into overbought territory which will tend to supportreversal action if it occurs. The market’s short-term trend is positive on the close above the 9-day movingaverage. The market’s close below the pivot swing number is a mildly negative setup. The next upside objective is80.24. The next area of resistance is around 80.17 and 80.24, while 1st support hits today at 80.05 and belowthere at 79.98.