While the Dollar forged another new high for the move overnight it has been unable to hold all of thosegains into the early US Thursday trade. The Dollar probably saw some residual lift overnight because of thesurprise hawkish revelation from the FOMC meeting minutes yesterday. The Dollar also gets some fresh lift fromdisappointing private Chinese PMI results and perhaps the Dollar remains well bid because of reports of softprices in August from the Euro zone. The Dollar also catches a lift from softer than expected UK retail salesresults. Expectations call for a decline in US claims today, and an improvement in leading indicators but thosereadings might be countervailed by expectations of a decline in Existing home sales and a drop in the Philly Fedbusiness survey. Given the magnitude of the rise in the Dollar over the last 4 trading sessions and thecombination of hawkish Fed news and strong data, we have to think that the Dollar is temporarily overdonefundamentally and technically.
Technical Outlook: The rally brought the market to a new contract high. Rising stochastics atoverbought levels warrant some caution for bulls. The close above the 9-day moving average is a positive shorttermindicator for trend. There could be more upside follow through since the market closed above the 2nd swingresistance. The near-term upside target is at 82.61. With a reading over 70, the 9-day RSI is approachingoverbought levels. The next area of resistance is around 82.49 and 82.61, while 1st support hits today at 82.09and below there at 81.81.