Dollar has fallen back from this week’s highs off a combination of Yellen speech fears and classicweekending profit-taking. Given the breakneck pace of gains in the Dollar early in the week, some back and fillaction is to be expected. However, in looking at the macro-economic news flow this week, the Dollar clearlyshowed its economy was to be respected. The Dollar might be somewhat off balance and in a corrective trackbecause of the uncertainty of Yellen comments, which could be more hawkish than expected, or they could alsoreiterate the need to leave US rates low and that could take a lot of buying impetus away from the Dollar. In fact,the absence of US scheduled data flows today leaves the focus of the trade on Jackson Hole, with the tradethinking the ECB will clearly hint at additional easing. Initial support in the September Dollar is seen this morningat 82.16 but that level will be violated if the totality of Yellen comments center on the ability to discountmechanical inflation adjustments.
Technical Outlook: The market rallied to a new contract high. Daily stochastics have risen intooverbought territory which will tend to support reversal action if it occurs. The market’s short-term trend is positiveon the close above the 9-day moving average. The market could take on a defensive posture with the dailyclosing price reversal down. It is a mildly bullish indicator that the market closed over the pivot swing number. Thenear-term upside target is at 82.51. With a reading over 70, the 9-day RSI is approaching overbought levels. Thenext area of resistance is around 82.34 and 82.51, while 1st support hits today at 82.09 and below there at 82.00.