The Dollar is in vogue in the wake of weakness in other actively traded currencies. Apparently themarket thinks the Fed testimony was indicative of a growing economy as the Fed head also indicated that the USjobs market still need support from loose Fed policy. However, the Dollar is responding on the upside and hasreached up to the highest level since June 18th and that suggests some upside follow through is possible today.The trade probably expects some support from PPI, Industrial production and or the NAHB results later thismorning. Somewhat surprising is the fact that the Dollar is even managing to gain on the Pound, which sawsomewhat favorable June jobless results overnight. With the Fed actually warning against a rush to higher rates,we see the rally in the Dollar to be misguided and we would think the Dollar will need to see positive data flows tosustain and justify the rallies over the last 48 hours.
Technical Outlook: The market now above the 60-day moving average suggests the longer-termtrend has turned up. The upside crossover (9 above 18) of the moving averages suggests a developing shorttermuptrend. Positive momentum studies in the neutral zone will tend to reinforce higher price action. Themarket’s close above the 9-day moving average suggests the short-term trend remains positive. Since the closewas above the 2nd swing resistance number, the market’s posture is bullish and could see more upside followthroughearly in the session. The next upside target is 80.67. The next area of resistance is around 80.58 and80.67, while 1st support hits today at 80.29 and below there at 80.09.