With a fresh upside breakout and the highest trade since the June highs, the Dollar clearly remains in vogue. Adding into the upward track in the Dollar is a series of slack economicdevelopments abroad overnight. In addition to a decline in German business sentiment, the trade also saw slowerItalian wage inflation and soft Japanese inflation readings overnight and that furthers the edge held by theGreenback. The Dollar is also managing gains in the face of the strongest UK 2nd quarter GDP growth since theend of 2007, and that highlights the dominance of the Dollar. In retrospect, the downside breakout in US initialclaims to the lowest level since 2006 would seem to leave the US economy in a definitive recovery track andtherefore the path of least resistance in the Dollar is up and next resistance might not be seen until the 81.17level.
Technical Outlook: Momentum studies are trending higher but have entered overbought levels. Apositive signal for trend short-term was given on a close over the 9-bar moving average. The close over the pivotswing is a somewhat positive setup. The near-term upside objective is at 81.09. With a reading over 70, the 9-dayRSI is approaching overbought levels. The next area of resistance is around 81.03 and 81.09, while 1st supporthits today at 80.86 and below there at 80.76.