The Dollar has a definitive pattern of lower highs this week. The most important take away from theaction this week is that the Dollar was woefully unable to benefit from noted weakness in the European economyand that it took rekindled fears of a European banking crisis just to provide the Dollar with some minor lift. WhileUS claims declined yesterday that news was countervailed by a rise in ongoing claims and by FOMC suggestionsthat no change in policy was to be expected soon. However, weak UK data and residual banking concerns inEurope leave the Dollar with a lack of competition. Unfortunately for the bull camp the US economic report slate isvery thin today and the overt risk off vibe from yesterday has been replaced by a minor wave of optimism. Pushedinto the market we favor the downside in the Dollar, looking for a retest of the sub 80.00 level on the charts.
Technical Outlook: Positive momentum studies in the neutral zone will tend to reinforce higher priceaction. The market’s short-term trend is positive on the close above the 9-day moving average. The daily closingprice reversal up is a positive indicator that could support higher prices. Market positioning is positive with theclose over the 1st swing resistance. The next upside objective is 80.37. The next area of resistance is around80.28 and 80.37, while 1st support hits today at 80.06 and below there at 79.93.