The Dollar remains near the recent highs in the wake of initial claims data yesterday that could haveundermined sentiment especially when one considers the technically overdone condition of the Greenback.However, the Dollar is underpinned by news of fresh sanctions from both the US and EU toward Russia as thatincreases the fear of more economic headwinds and that also increases the prospects of a safe haven flowtoward the dollar in the event of a reaction from Putin. Therefore, one might expect the Dollar to threaten contracthighs directly ahead especially if expectations for today’s US scheduled data are realized. Adding into the bull’scase is the looming FOMC meeting next week which we think has entrenched a buy the rumor mentality for theDollar. In other words, the trade is embracing the notion that US rate timing is being pulled forward and today’sdata probably fuels that sentiment. Buying support in the December Dollar is seen at 84.40 and we expect to seenew highs even if those highs fail to hold.
Technical Outlook: Daily stochastics turning lower from overbought levels is bearish and will tend toreinforce a downside break especially if near term support is penetrated. The close above the 9-day movingaverage is a positive short-term indicator for trend. It is a mildly bullish indicator that the market closed over thepivot swing number. The next downside target is 84.00. The market is becoming somewhat overbought now thatthe RSI is over 70. The next area of resistance is around 84.45 and 84.54, while 1st support hits today at 84.19and below there at 84.00.