A sharp range up extension in the Dollar overnight hints at the prospect of an upside breakout. When one considers the slack German ZEW results this morning and the fact that the September Dollar Index to thismorning’s highs, has posted a gain of almost 50 points from last week’s lows that has to embolden the bull camp.While the Russian truck convoy appears to be humanitarian aid, the Ukrainians are suggesting they will not allowthe Russian trucks to deliver the aid and therefore there are fresh knock on slowing fears surfacing for EasternEurope, which in turn serves to lift the Dollar relative to the Euro and Swiss. With German sentiment readingsweaker than expected overnight and that news following disappointing economic news from Italy last week, theDollar looks destined to return to and above the early August highs of 81.775.
Technical Outlook: Momentum studies trending lower from overbought levels is a bearish indicatorand would tend to reinforce lower price action. The close above the 9-day moving average is a positive short-termindicator for trend. It is a mildly bullish indicator that the market closed over the pivot swing number. The nextdownside target is now at 81.43. The next area of resistance is around 81.55 and 81.59, while 1st support hitstoday at 81.48 and below there at 81.43.