The Dollar remains within striking distance of its recent highs overnight in the wake of comments from the BOJ that the US economy doesn’t appear to be caught in cyclical stagnation. While the BOJ comments aren’ta ringing endorsement of the Dollar’s macro-economic differential edge, recent US scheduled data flows havebeen positive but there is a lack of key data scheduled for release today. Therefore corporate earnings and aspeech from the US Treasury Secretary might drive prices today. Expectations for Thursday’s US initial claimsreport call for a slight rise and the failure to fall below the critical 300,000 level in that important reading mightspark some valuation questions for the Dollar which has forged almost a month of impressive gains! While wecan’t rule out a continuation to the 81.00 level in the September Dollar directly ahead, the Greenback needs asteady stream of positive data to justify its dominating pattern of late. On the other hand, fears of slowing in theEU off Russian sanctions and a less than hawkish tilt from the BOE overnight means that the Dollar has almostno competition.
Technical Outlook: Momentum studies are trending higher but have entered overbought levels. Themarket’s short-term trend is positive on the close above the 9-day moving average. Since the close was above the2nd swing resistance number, the market’s posture is bullish and could see more upside follow-through early inthe session. The near-term upside target is at 81.12. The market is becoming somewhat overbought now that theRSI is over 70. The next area of resistance is around 81.00 and 81.12, while 1st support hits today at 80.70 andbelow there at 80.50.